PNC Corp. Agrees to Pay $90M Restitution
WASHINGTON (AP) _ The nation’s seventh-largest bank holding company, PNC ICLC Corp., has agreed to pay $90 million in restitution and $25 million in penalties to avoid a criminal trial on charges of securities violations, the Justice Department said Monday.
The company, a subsidiary of PNC Financial Services Group Inc. of Pittsburgh, was charged with conspiracy to violate securities laws by transferring $762 million in troubled loans and investments to off-balance sheet organizations, the Justice Department said.
The government will defer prosecution for 12 months and dismiss the complaint if the company continues to comply in a continuing investigation.
The chief executive of the company’s parent, James E. Rohr, said in a statement Monday that the company ``regrets its involvement″ in the deals.
Deputy U.S. Attorney General Larry Thompson said the company’s cooperation with investigators was important in the decision to defer prosecution.
``This agreement strikes a balance between our commitments to rooting out corporate corruption and securing the assistance we need to conduct swift and thorough investigations,″ Thompson said in a statement.
The U.S. Securities and Exchange Commission had earlier determined that the bank tried to conceal its $762 million in potential liabilities. It placed the bank under a six-month regulatory watch last summer but did not fine the company.
Prosecutors said PNC ICLC transferred the liabilities in 2001 to off-balance sheet organizations that were not sufficiently independent to qualify for such an accounting maneuver. After the company restated its earnings in early 2002, its stock fell more than 9 percent.
PNC said Monday it will take a pretax charge to earnings of $120 million in the second quarter of 2003 reflecting the agreement with the Justice Department and related legal expenses.
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