Enron: Andersen Hits Back after $1B Lawsuit Threat
Andersen chief executive Joe Berardino has lambasted the financial reporting system as it was hit by a $1 billion legal threat from disgruntled former employees of the energy giant Enron.
According to an article in the British newspaper, The Times, members of Enron's retirement plan are seeking the damages, together with the return of Andersen's fees, in the first shot in what could be a lengthy battle for compensation in light of the $80 billion lost at Enron.
The lawsuit reportedly alleges that Andersen "knowingly participated in Enron's breaches of fiduciary duty" for not revealing $2.6 billion of debt at the firm.
Meanwhile, in reference to the now-formal SEC investigation into the firm, Mr. Berardino has accused the whole financial reporting system for delivering complex information from the past "to some investors with limited understanding of what is happening at the present and what is likely to occur in the future."
Deloitte & Touche was another player recently brought into the mire - the Big Five rival has announced it will expand the scope of its peer review into Andersen, particularly the Houston office at the center of the affair.