Arizona's Corporation Commission has joined the group of those who are taking the Arthur Andersen company to court over its audit of the Baptist Foundation of Arizona. The securities division of this organization, along with the Arizona Attorney General's Office will file a civil lawsuit against Andersen.
This follows the December filing of a $500 million suit against Andersen by the Arizona Accountancy Board as well as a lawsuit filed by the BFA earlier last year. The foundation's bankruptcy trustee has also filed suit against Andersen.
Arthur Andersen had acted as the auditor of the Baptist Foundation of Arizona for 15 years. When accounting irregularities came to light, the BFA filed for Chapter 11 bankruptcy on November 9 last year.
The latest legal action will seek full restitution for 11,000 investors who lost $589 million when the Baptist Foundation filed for bankruptcy. In addition to making restitution, the Big Five accounting firm may face millions of dollars in fines if it loses in court.
The lawsuit accuses Andersen of securities fraud, selling unregistered securites, violating audit procedures, and consumer fraud in its audit approvals of the Baptist Foundation's financial statements.
In response to the latest lawsuit, Arthur Andersen has published a statement claiming, "We requested this action. We firmly believe that a court of law is the more appropriate venue to provide a fair and impartial hearing for this matter."