FINOVA then hired Ernst & Young, but when the annual report was nally released
the company also announced that it would be restating earnings for the year. The price
of the companys stock began to decline. FINOVA worked diligently to restore credibili-
ty, with its ocers noting that the auditors disagreements with managements numbers
were often because the company was too conservative in its accounting and that there
were counterbalances for decisions on aggressive vs. conservative accounting practices.99
However, with a shift in economic conditions and the end of the high-tech market run,
the asset quality of FINOVAs portfolio was deteriorating. FINOVAs acquisition of the
Fremont Financial Group of California for $765 million only increased investors con-
cerns about the direction of the company and the quality of its management. By the end
of 1999, its stock price had dipped to $34 per share.