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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Jim Willie CB who wrote (51151)	5/9/2002 12:41:49 AM
From: stockman_scott	Respond to of 65232

The Residential Real Estate Bubble lewrockwell.com

To: Jim Willie CB who wrote (51151)	5/9/2002 3:10:08 AM
From: stockman_scott	Respond to of 65232

SEC tells of Andersen vow David Teather in Houston Thursday May 9, 2002 The Guardian Arthur Andersen told financial watchdogs it had "learned its lesson" after settling an accounting scandal at US firm Waste Management last year and assured officials that there was no need for further sanctions. In the second day of testimony in the criminal trial for obstruction of justice, federal prosecutors attempted to portray Andersen as a company that had repeatedly broken the rules. The accounting firm is accused of shredding "literally tons" of documents related to its audit of Enron, the failed energy firm, when it was aware they would be sought by federal investigators. As the trial in Houston continued, so did the break-up of the firm. It reached agreement to sell as many as 24 of its business consulting offices to rival KPMG for $284m (£197m). The offices had accounted for about 15% of Andersen revenues. Securities and exchange commission official Thomas Newkirk gave evidence yesterday on the restatement of earnings at Waste Management and another US firm, Sunbeam. Both had been Andersen clients. Mr Newkirk said that after reaching a $7m settlement with the SEC over the $1bn restatement by Waste Management, Andersen partner Gary Goolsby had offered assurances that there would be no repeat of the scandal. It was Mr Goolsby who signed the settlement. "I recall him saying on several occasions that Arthur Andersen had learned its lesson," Mr Newkirk said. Rusty Hardin, the lawyer defending Andersen, had attempted to prevent the admission of evidence on the prior cases. At one point yesterday he complained that he had faced "six hours of volunteering [information] about irrelevant cases". Mr Hardin sought to discredit the SEC, noting the speed with which the conviction had been brought against Andersen and the reliance placed upon the Wall Street Journal as a source of information. "Do we need the SEC when we have the Wall Street Journal?" he asked. He asked whether Mr Newkirk was biased about Andersen. "Did you give a talk in December 2001 suggesting in any way you were going to get Arthur Andersen?" Mr Hardin asked. "I certainly did not," the SEC official replied. By introducing the previous cases, the government hopes to show that Andersen shredded the Enron documents because it was aware of the "deep, deep trouble" it faced because in the Waste Management settlement it had submitted to an injunction against further wrongdoing. The defence counters that the current case against Andersen is without precedent and the firm would not have been aware of the consequences of the Enron investigation. The key witness, David Duncan, is expected to appear today. He is the former lead partner on the Enron auditing account and has already pleaded guilty to obstruction of justice. He made a plea deal with the government in return for his testimony. A second SEC official, who opened the original inquiry into Enron, said interest had been sparked by the sudden departure of former chief executive Jeffrey Skilling in August last year. The notes and records kept by auditors were "critical to any investigation". guardian.co.uk