L22 Notes_Part_14 - Criminal Sanctions The government...

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Criminal Sanctions The government charged Andersen with destruction of documents related to the firm’s audit of Enron. During the period between October 19, 2001, when Enron alerted AA that the SEC had begun an inquiry into enron’s accounting for certain special purpose entities, AA personnel shredded extensive amounts of physical documentation and deleted The firm was ultimately convicted of one count of obstruction of justice. The conviction was not based on the document shredding, but it was based on the alteration of a memo related to Enron’s chracterization of charges as nonrecurring in its third quarter 2001 earnings release, in which the company announced a loss of $618 million. AA lost the ability to audit public companies. The decision was overturned but AA was out of operation by that time.
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Criminal Law A. Securities Act of 1933 and Securities Exchange Act of area 1934 1. Can be found guilty for willful illegal conduct i. Omission of material facts needed to not mislead ii.
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L22 Notes_Part_14 - Criminal Sanctions The government...

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