Mayer Brown and Wilmer Cutler Pickering Hale and Dorr have taken roles advising Ernst & Young (E&Y) in settlement talks with regulators over the accounting firm's failure to report fraudulent activity at one of its clients, reports The Am Law Daily.

The Securities and Exchange Commission (SEC) had accused E&Y of issuing unqualified audit opinions that said that Chicago-based company Bally Total Fitness's 2001 and 2003 financial statements conformed with US accounting rules.

Under the deal struck with the SEC, E&Y will pay $8.5m (£5.3m) in fines, while six E&Y partners accepted sanctions ranging from censure to a two-year ban on auditing public companies. Two Bally executives – both former E&Y partners – also settled charges with the SEC.

In settling the allegations, E&Y and the former and current partners did not admit to any wrongdoing.

In a statement, E&Y said: "These settlements allow us and our partners to put this matter behind us and resolve issues that arose more than five years ago."

In total, eleven US law firms took roles advising E&Y, Bally and the eight individuals sanctioned by the SEC as part of the settlement.

Latham & Watkins represented Bally after previously advising the company on its most recent Chapter 11 proceeding, work that marked Latham's more aggressive move into representing debtors in bankruptcy.

Randy Fletchall, the partner in charge of E&Y's national office, turned to Fried Frank Harris Shriver & Jacobson for representation, while other firms to take roles advising current and former E&Y partners included Arnold & Porter, Gibson Dunn & Crutcher and Jones Day.

This article first appeared on The Am Law Daily blog on americanlawyer.com.