Judge Hits Andersen With Maximum Sentence

Federal District Judge Melinda Harmon hammered her gavel for Arthur Andersen LLP for the last time yesterday, sentencing the firm to five years' probation and a $500,000 fine as a penalty for obstructing justice in regard to the firm's audit of Enron Corp. The sentence is the maximum allowable by law.

"Andersen's conduct in obstructing the Securities and Exchange Commission investigation of Enron, we submit, contributed to - contributed to significantly - the historic shaking of the foundation of our markets," prosecutor Sam Buell told the Court.

Earlier this year Andersen was found guilty of obstruction of justice. The jury relied heavily on an internal memo from Andersen in-house counsel Nancy Temple in arriving at its decision. Ms. Temple, who refused to testify at the trial, authored a controversial memo in which she documented a conference call in which Mr. Duncan challenged Enron's reporting of a loss as "nonrecurring." In a preliminary draft, Mr. Duncan described the reporting as "misleading." Ms. Temple suggested "aggressive" instead. She also asked that he remove her name from the final copy.

Andersen is expected to appeal on grounds that some of Judge Harmon's rulings regarding what evidence the jury heard and the instructions given the jury were improper. Another ground for appeal is the judge's decision to allow testimony about Andersen's controversial relationship with former clients Sunbeam and Waste Management.

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...

Already a member? log in here.

Upcoming CPE Webinars

Oct 22This webinar will include discussions of important issues in AU-C 800, Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks.
Oct 23Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.
Oct 30Many Excel users have a love-hate relationship with workbook links.
Nov 5Join CPA thought leader and peer reviewer Rob Cameron and learn ways to improve the outcome of your peer reviews while maximizing the value of your engagement workflow.