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...

Upcoming CPE Webinars

Jul 16
Hand off work to others with finesse and success. Kristen Rampe, CPA will share how to ensure delegated work is properly handled from start to finish in this content-rich one hour webinar.
Jul 17
This webcast will cover the preparation of the statement of cash flows and focus on accounting and disclosure policies for other important issues described below.
Jul 23
We can’t deny a great divide exists between the expectations and workplace needs of Baby Boomers and Millennials. To create thriving organizational performance, we need to shift the way in which we groom future leaders.
Jul 24
In this presentation Excel expert David Ringstrom, CPA revisits the Excel feature you should be using, but probably aren't. The Table feature offers the ability to both boost the integrity of your spreadsheets, but reduce maintenance as well.