State of Geneva vs. Ernst & Young

Froriep has been representing the State of Geneva since 2002 in a scheme of proceedings related to its obligation in 2000 to refinance and rescue the cantonal Bank of Geneva ("BCGE"). Jean-Luc Herbez is the co-lead counsel on that project, with the support of Alain Gros and David F. Braun.fter several years of procedural litigation, Ernst & Young agreed in March 2012 to settle the claim for an amount of CHF 110 million.

The State of Geneva sued Ernst & Young SA in its capacity as former auditor of the BCGE from 1994 until 2000, for damages up to CHF 2.3 billion caused by the State rescue of the Bank. The State's intervention became mandatory in 2000 despite the publication of regular yearly benefits and accounts giving a grossly embellished picture of (mortgage) risks and allegedly sufficient default provisions to cover those risks. A

This is the largest amount ever paid by an audit company in Switzerland to settle a legal claim.