Yesterday, accounting firm Arthur Andersen’s conviction was overturned by the United States Supreme Court. The conviction was for obstructing justice by destroying documents related to Enron before it fell apart.
In a unanimous decision, it was concluded that Arthur Andersen’s conviction three years ago was improper because the jury instructions were too vague, and the jurors couldn’t properly determine the verdict.
Upon the conviction in 2002, the firm basically collapsed. As a result, about 30,000 workers lost their jobs. MarketWatch explains a little about what happened:
According to lawyers for Andersen, the lower court wrongly instructed the federal jury in the case about what issues it could use to convict the company…
Last year in July, Former Enron Chairman Kenneth L. Lay was indicted by a federal grand jury in Houston, almost three years after the energy company collapsed.
The Andersen case inspired tougher penalties for corporate wrongdoers and helped bring about 2002’s Sarbanes-Oxley Act, noted Professor John Coffee of Columbia University Law School.
Prosecutors accused Andersen of having its employees get rid of company records while the Securities and Exchange Commission prepared to investigate Enron’s accounting practices.
Andersen said that it was only reminding its employees of a “document-retention policy,” which included the elimination of such documents following the completion of an audit.
The company continued to shred documents unitl it received a subpoena from the SEC on Nov. 8, 2001, for doing so with its records related to Enron.
“It is, of course, not wrongful for a manager to instruct his employees to comply with a valid document retention policy,” wrote Rehnquist.
Andersen, which has also been involved in several other civil lawsuits, only has about 200 employees now, who apparently spend a great deal of their time dealing with legal work.
Chris is a staff writer for murdok. Visit murdok for the latest ebusiness news.
