Ernst & Young Consents to Sanction

The SEC issued  an  Order  Instituting  Public Administrative and Cease-and-Desist Proceedings  Pursuant  to  Section 21C of the Securities Exchange Act of 1934  and  Rule  102(e)  of  the Commission's Rules of Practice, Making Findings, and Imposing Remedial Sanctions against Ernst & Young, LLP. In  the  Order,  the  Commission sanctioned E&Y for conduct arising out of  the  firm's  violations  of auditor independence  standards.  Without  admitting  or  denying  the Commission's findings, E&Y consented to the issuance of the Order.  In its Order, the Commission found that, throughout 2001, E&Y, through National Office partner Michael S. Joseph, helped develop  and  market
an accounting product for one client,  American  International  Group, Inc., and advised an audit client, The PNC Financial  Services  Group, Inc., on the accounting treatment for a version of that  product  that PNC purchased. The Commission found  that  as  a  result  of  Joseph's actions,  E&Y  compromised  its  auditor  independence.  Because E&Y was  not  independent, the firm did  not  conduct  independent  reviews  of  PNC's  financial statements for the second and third quarters of 2001  and,  therefore, was a cause of PNC's violations of reporting provisions of the federal securities laws that require quarterly reviews of financial statements to be conducted by an independent accountant.