Duncan tells of Andersen failures
Star witness in the Andersen trial, David Duncan, has told a Houston court the firm did nothing to stop clients inflating profits - despite telling watchdogs it would clean up its act.
The splintering firm knew it was on probation as the Enron scandal began to unfold and spent months trying to cover its tracks, the former audit partner added.
Duncan said that because the firm had already been heavily fined by the Securities & Exchange Commission, it could not afford to be caught in another financial scandal.
According to reports, federal prosecutors said every Andersen employee was warned that any further high-profile battles with regulators would be disastrous.
Legal settlements prior to Enron
- June 2001: Andersen agrees to pay $7m (£4.8m) to the SEC to settle allegations of fraudulent audit work, relating to its audit of Waste Management Inc’s financial statements dating from 1993 to 1996.
- May 2001: Andersen agrees to pay $110m (£76m) to Sunbeam shareholders, settling a fraud lawsuit over its accounting work for the embattled appliance maker.