EMAG reaction to Court of Appeal on Ernst and Young: 25th July, 2003:

Coming in the same week that the American Securities and Exchange Commission has heavily censored Ernst & Young over its lack of independence in auditing, the ruling on The Equitable Life comes as a devastating double-whammy for Ernst & Young.

The Court of Appeal ruling was effectively a nine goals to one victory for the Equitable. This must now be life threatening in magnitude to E & Y, since the appeal court judges gave an unequivocal green light to the multi-billion pound actions. In consequence, Ernst & Young must surely now be forced to the negotiating table from a position of weakness. This is the first excellent news in the millennium for the remaining half million policyholders in Equitable Life.

EMAG's general secretary, Paul Braithwaite, said:

"This ruling further undermines the recent Ombudsman's report which concluded that investors were all aware that they were investing in a weak fund. The case is about the deliberate obfuscation by auditors (and regulators) or the true parlous state of the society. In consequence, people continued to invest in a society holed below the waterline, the knowledge of which was withheld by the auditors and, more critically, the regulators who there ostensibly for policyholder protection."

Further information: Paul Braithwaite