A lawsuit in Pennsylvania will decide whether PNC Bank may conceal work done by a consultant from investors looking for incriminating information.

The Pittsburgh-based bank is being sued by a group of unsatisfied investors in First Eastern Bank, a company PNC recently bought.

The American Bankers Association told the state Superior Court this week that studies by consultants are privileged - not subject to disclosure in legal cases.

A trial court ruled Oct. 16 that reports by consultants must be disclosed.

That triggered PNC's appeal to the Superior Court.

"Unless the self-evaluative privilege is recognized, banks will have a strong disincentive to undertake such evaluations," Mr. Crotty said. "That benefits no one - not the banks, not opposing parties in litigation, not the government regulatory agencies, and not the public."

In a friend-of-the-court brief, the ABA said requiring the bank to disclose the report would punish it for trying to become safer and more profitable.

"Make no mistake, the forced disclosure of the confidential reports at issue here is punishment for doing the right thing," Mr. Crotty wrote. "It sends a message to all banks that they should, in the future, avoid furnishing evidence against themselves."

The investors sued First Eastern and PNC, charging that First Eastern officials misrepresented the bank's financial condition and breached an agreement to look at a variety of merger targets.

As part of the suit, the investors asked PNC to disclose a report on First Eastern's management conducted by Furash & Co., a Washington consulting firm.

The bank argued that the plaintiffs do not need the report because it doesn't address any issues raised in the suit.

Self-evaluations garnered headlines last year in the fair-lending arena, with several bankers expressing concern that the Justice Department or private litigants would subpoena their studies.

Attorney General Janet Reno has since promised not to seek the reviews, and she has proposed a bill preventing private parties from getting them either.

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