Business & Finance
Ernst & Young, the accounting giant, was ordered not to accept new corporate clients for six months after being found to have violated auditing rules. An administrative law judge for the Securities and Exchange Commission ruled the company had engaged in product development with PeopleSoft Inc. of Pleasanton, Calif., at the same time it was auditing the latter's books. The penalty also requires Ernst & Young to refrain from future violations, to hire an outside consultant to review its policies, and to pay a $1.7 million plus interest in restitution costs.
Boeing Co. lost another billion-dollar contract to build tanker planes - its second such setback in three months. Australia's defense minister, in announcing that his government had awarded the work to Airbus Industrie, Boeing's No. 1 rival, said the former's A330 model offered more value for the money. Britain's Royal Air Force used the same words in January when it chose Airbus over Boeing for a $24 billion contract to build refueling planes.
American Airlines, struggling to recover from years of losses, took a new hit Friday when an arbitrator ordered it to pay $23 million to its pilots' union in a dispute over shifting flights to its commuter subsidiaries. Pilots who fly for those subsidiaries are paid less than those who work for American itself. A spokesman for the Allied Pilots Association said it was gratified at the ruling but was considering ways of settling the issue without cash changing hands.
Plans to liquidate National Century Financial Enterprises Inc. were OK'd by a federal court in Columbus, Ohio, Friday - 17 months after the healthcare lender filed for bankruptcy and ceased operations. National Century, based in Dublin, a Columbus suburb, had loaned money to struggling healthcare providers in exchange for their portfolios of outstanding bills, which were packaged and sold as bonds to investors. The liquidation process will pay creditors a fraction of what they are owed, reports said.
Sovereign Bancorp announced it will close "about" 20 branches acquired in its $1.1 billion merger earlier this year with Seacoast Financial Services Corp. of Massachusetts. A spokeswoman said the move will result in the loss of 350 jobs, mostly in New Bedford and Weymouth, Mass. Sovereign is based in Philadelphia.