Andersen Named in Class Action Suit

Lawyers representing more than 400 current and previous Enron employees have filed a class action lawsuit in Houston, naming several Enron executives, Enron's auditor Big Five firm Andersen, and the Northern Trust Company as defendants. The Northern Trust Company is the trustee for Enron's retirement plan.

The plaintiffs are asking to be compensated for losses incurred in their 401(k) retirement plans due to the rapid decline in value of Enron stock as a result of actions of Enron executives. "Enron executives were profiting from an elaborate shell game, using the hard-earned retirement savings of their loyal employees," stated Randy McClanahan, one of the lawyers representing Enron employees in the suit. "We plan to show that the people running Enron's 401(l) retirement plan disregarded the very employees that federal law requires they protect."

Enron employees have filed several lawsuits against officials of the beleaguered energy company and its auditors. Enron itself is not named as a defendant. The company filed for Chapter 11 bankruptcy in December and is protected from legal action while the bankruptcy is proceeding.

Andersen CEO Expresses Concern, Confidence

Meanwhile, in a published statement on Monday, Andersen Chief Executive Officer Joseph Berardino stressed the point that the 85,000 members of the Andersen worldwide firm are "appalled by what happened" regarding the Enron situation. He referred to the 85,000 "honest, hard-working people of Andersen" as victims "who are still being hurt by (Enron's) fallout."

Mr. Berardino stated that the Chicago-based firm is taking steps to find out what its auditors knew about Enron's situation, when they knew it, and what the auditors believed they were accomplishing when they destroyed documents.

Mr. Berardino met with the press on Monday, forecasting that Andersen will survive the Enron situation, in spite of a recent loss of clients. "People who know us well continue to hire us and stand by us. People who don't know us as well are less anxious, frankly, to hire us. Yes, we've lost business," Mr. Berardino said. But, he added, "We feel very confident that we can get through this."

You may like these other stories...

Here's a CPA who truly walks the walk. On March 15, Frank Ryan, CPA, departed San Diego, California, with plans to be in Ocean City, Maryland, by July 2 to teach a course at the Maryland Association of CPAs’ (MACPA...
When Theodore J. Flynn first joined the Massachusetts Society of CPAs (MSCPA) in 1970, it was a different world and a different profession.  The "Big Eight" were still headquartered in Boston. Vietnam War...
Accountant Rickey Charles Goodrich had it a little too good. Many bean counters would kill to serve as financial guru to the likes of Pearl Jam. Goodrich was hired in 2005, and the following year, he became the CFO of Curtis...

Upcoming CPE Webinars

Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
Apr 30
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.
May 1
This material focuses on the principles of accounting for non-profit organizations’ expenses. It will include discussions of functional expense categories, accounting for functional expenses and allocations of joint costs.
May 14
Save your relationship in those few situations where your performance falls far from perfect. It’s easy to want to brush service failures under the rug, hope no one notices and assume that somehow everything will be all right. In this workshop, Kristen Rampe, CPA will give you the tools to strengthen your professionalism in the face of the worst-case-scenario. Don’t let experience be your only teacher on these topics!