Well-known U.S. accounting firm Arthur Andersen was found guilty of obstruction of justice by a federal jury on Saturday, in a verdict that could doom the veteran firm and bolster the government's investigation of the bankruptcy case of energy giant Enron Corp.
The 12-member jury, which heard nearly five-weeks of testimony before U.S. District Judge Melinda Harmon and had deliberated painstakingly for the last 10 days, reached their verdict fifteen minutes after reconvening on Saturday morning in a court in Houston, Texas.
Andersen was found guilty of obstructing justice for shredding documents related to its client Enron Corp. on notice of a federal investigation. Andersen had claimed that the documents were destroyed as part of its housekeeping duties and not as a ruse to keep Enron documents away from the regulators.
The verdict came a day after Judge Harmon issued a crucial ruling in the case, one that appeared to give the jury permission to convict the accounting firm even though the individual jurors differed as to which Andersen employee broke the law.
The verdict will likely be a fatal blow for the 89-year-old accounting firm, which has laid off 7,000 employees and lost more than 650 of its 2,300 public audit clients this year.
Andersen still faces an investigation by the Securities and Exchange Commission and a class-action lawsuit filed by Enron shareholders and employees.
The government hopes to use the verdict in the Andersen case tobuild other prosecutions against senior managers at Enron, which moved millions of dollars in debt off of its books with accounting tricks approved by its auditors.
( June 17, 2002)
