Supreme Court overturns Arthur Andersen's conviction in Enron case

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Tuesday, May 31, 2005

Supreme Court overturns Arthur Andersen's conviction in Enron case

By HOPE YEN Associated Press Writer

(AP) - WASHINGTON-The U.S.Supreme Court on Tuesday overturned the conviction of the Arthur Andersen accounting firm for destroying Enron Corp.-related documents before the energy giant's collapse.

In a unanimous opinion, justices said the former accounting firm's June 2002 conviction was improper. It said the jury instructions at trial were too vague and broad for jurors to determine correctly whether Andersen obstructed justice.

"The jury instructions here were flawed in important respects," Chief Justice William H. Rehnquist wrote for the court.


The ruling is a setback for the Bush administration, which made prosecution of white-collar criminals a high priority following accounting scandals at major corporations. After Enron's 2001 collapse, the Justice Department went after Andersen first.

Enron crashed in December 2001, putting more than 5,000 employees out of work, just six weeks after the energy company revealed massive losses and writedowns.

Subsequently, as the Securities and Exchange Commission began looking into Enron's convoluted finances, Andersen put in practice a policy calling for destroying unneeded documentation.

Government attorneys argued that Andersen should be held responsible for instructing its employees to "undertake an unprecedented campaign of document destruction."