HOUSTON, Texas (HedgeWorld.com)–Arthur Andersen LLP, the well-known accounting and auditing firm brought down by its association with Enron Corp., acknowledged last week that the jury verdict in its federal criminal trial in Houston has effectively ended its audit practice.
“By August 31, , the firm expects to cease practicing before the [Securities and Exchange] Commission and expects to begin immediately an orderly process of dealing with state regulators leading to surrender of the firm’s licenses,” it said in a statement Saturday.
An informal survey of hedge fund managers revealed some personal sadness about friends at Andersen, but little concern about any new effect upon the market for auditing from this development. The market has already absorbed the virtual disappearance of Andersen as a major player in the months since its indictment in March.
The firm and the SEC have agreed to a benchmark date of Aug. 31 because Andersen will make post-trial motions, in an effort to persuade Judge Melinda Harmon to set aside this verdict. The last day of August is an estimate of the time that both Andersen and the government will take to brief these motions.
If judgment is entered in accord with the verdict, as everyone now expects, the conviction would be grounds for automatic suspension of Andersen’s ability to practice before the SEC.
Hung Jury and the Allen Charge