Word: enronizing
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...barely alive, but one question remained: What would its epitaph be, the lesson for others? An answer came last Saturday, when a Houston jury found Andersen guilty of obstructing justice. It provided a moment of vindication for investors who lost more than $60 billion in the spectacular collapse of Enron, whose books had been audited by Andersen. But the verdict held a twist: at first the case seemed to hinge on whether an Andersen employee ordered tons of Enron paperwork to be shredded before investigators arrived. Jurors said they based their decision instead on Andersen's alteration of an internal...
...police rogue corporations. As the jurors deliberated for the ninth day last Friday, the stock market was tumbling to its lowest level since Sept. 21, much of the decline tied to the lack of investor confidence in corporate America. The verdict also revved up prosecutors for their next target: Enron and its executives, including former CEO and chairman Ken Lay and former CFO Andrew Fastow...
Although the jury convicted the entire firm, it focused the blame on a single person, Andersen's Chicago-based lawyer Nancy Temple, who, according to the legalese, played the "corrupt persuader" who led others astray. Knowing the Securities and Exchange Commission was starting to scrutinize Enron's books, Temple told David Duncan, who supervised the account, to remove her name from a file memo that disagreed with Enron's characterization of a $1 billion loss as "non-recurring." Said prosecutor Andrew Weissman: "This is a perfect example of Arthur Andersen sanitizing the record so the SEC would have less information...
...victory also sets up the six-month-old Enron Task Force at the Justice Department to bore in on the energy-trading company. Prosecutors want to prove that former bosses Lay and Jeff Skilling and other executives touted Enron's stock when they knew the company was in a free fall--a violation of securities law. "This [verdict] can only help us," said Leslie Caldwell, chief of the task force. "We are going to get to the bottom of the Enron debacle...
...Andersen testimony will be helpful. Duncan told jurors he didn't believe the $1 billion loss the company took to unravel some off-the-books partnerships was enough reason to question Enron's future health. If Andersen's lead accountant wasn't worried, why should Lay have been concerned? "Duncan definitely harmed the case against Lay," says former prosecutor and Houston securities lawyer Christopher Bebel. On the other hand, he says, lower-level Enron executives facing charges won't find much solace in the transcripts...