Enron Epilogue ... or Is It?

The once-prominent accounting firm Arthur Andersen has long been shuttered, but its ill-fated entanglement with Enron Corp. is still playing out—and, as far as federal securities regulators are concerned, appears to be ongoing.

The Securities and Exchange Commission announced the latest development yesterday—the filing and simultaneous settlement of a civil action against former Andersen partner, David B. Duncan, in connection with audits of Enron's financial statements.

Duncan, who admitted helping shred Enron documents in his role as Andersen's lead accountant for the Houston-based energy company, agreed to a civil action that charged him with violating the antifraud provisions of federal securities laws.

In a separate, but related, administrative proceeding, he was barred from appearing or practicing as an accountant before the commission.

No money penalties were announced. The commission charged that Duncan was reckless when he signed off, on Andersen's behalf, on unqualified audit reports that were false and misleading.

Duncan approved the audits, securities regulators said, even though he knew that Enron used "highly aggressive accounting ... practices" and entered into "unusual" year-end transactions.

In a deal that must still be approved by a federal judge, Duncan was accused of approving Enron's financial statements for 1998 through 2000 as conforming to industry accounting practices. However, those statements had material misstatements or omissions, the regulators noted.

The commission also said that three other Andersen partners—Thomas H. Bauer, Michael M. Lowther, and Michael C. Odom—settled administrative proceedings which found they had each engaged in improper professional conduct in connection with work on Enron.

None of them admitted or denied the commission's findings, but they also may not appear or practice before the commission.

In what could be an ominous note for anyone involved in the endless Enron saga, the S.E.C. noted that its "investigation is continuing."

Its original investigation into Enron's accounting occasioned Andersen's wholesale shredding of its client's documents. Andersen, which was once the world's fifth-biggest accounting firm, was convicted of witness tampering in a 2002 trial, at which Duncan testified, which led to its demise.

by Elizabeth Olson