Andersen fined $500,000, five-year probation in Enron case
By Our Corporate Bureau | 17 Oct 2002
Houston:
A federal judge fined accounting firm Andersen $500,000
on yesterday and sentenced it to five years’ probation
for obstructing justice in a probe of client Enron.
US district judge Melinda Harmon handed down the maximum sentence to the company, which was considered a paragon of accounting integrity before its disintegration. “I believe a message must be sent to the auditing community that the destruction of documents will not be tolerated while an investigation is ongoing,” Harmon said.
The sentencing comes exactly a year after Enron released a dismal third-quarter earnings report that sparked its rapid spiral into bankruptcy and harsh scrutiny of US corporate accounting practices.
Andersen was indicted in March 2002 after it admitted shredding Enron audit records while a US Securities and Exchange Commission probe into Enron was underway. To the end, Andersen maintained that its employees never had any criminal intent to frustrate federal investigators.