- - Wednesday, February 8, 2012


Chunk of former AIG assets sold to Goldman Sachs

The Federal Reserve said Wednesday that it had sold $6.2 billion of assets once held by bailed-out American International Group Inc. to New York investment bank Goldman Sachs.

The portfolio of “toxic” mortgage-backed securities was bought from AIG in 2008 via a special-purpose vehicle, Maiden Lane II, as part of the Fed’s effort to contain the financial and housing meltdown.

In a statement, the New York branch of the Federal Reserve said the winning bid “represented good value for the public.”

The sale means that all of the Fed’s $19.5 billion loan to Maiden Lane II for buying the assets has been repaid.

The Fed created two similar companies to harbor assets from Bear Stearns and AIG’s credit default swap business.


Ernst & Young to pay $2M in audit settlement

The watchdog agency for the accounting industry says it has fined Ernst & Young $2 million for alleged lapses in three audits of a pharmaceutical company.

The Public Company Accounting Oversight Board said Wednesday that the civil fine against the accounting firm was the largest it has levied since it began operating in 2003. At issue are audits of Medicis Pharmaceutical Corp. in 2005, 2006 and 2007.

In the settlement, the independent group also censured Ernst & Young, and it sanctioned four current and former firm partners.

In the audits, Ernst & Young failed to properly evaluate a significant element, the amount Medicis set aside to account for the cost of product returns.

Ernst & Young and the partners did not admit or deny wrongdoing.


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