So Close It’s Eerie… – Francine McKenna

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I so often agree with Tom Selling these days that I’m starting to think he’s my long lost half-brother… His rat-a-tat-tat, fact-based slam down makes me weep. With admiration.

I couldn’t agree more with his assessment of the weak WorldCom settlement if I had written it myself. Which I did, in a sense, with regard to a recent “lamo” sanction of the Deloitte Adelphia partner.

Given my admiration for Linda Thomsen, I hope this settlement was realized by some obscure SEC task force for former Arthur Andersen partners that works in the basement of 100 F Street NE.

You’ve heard the term “skunk works”? Well, let’s hope that no one with any self-respect had anything to do with this lame result, because it stinks.

SEC Settlement with Auditors of WorldCom: Too Little, Too Late?

Coming on the heels of accusations that the SEC is trending toward less vigorous enforcement against financial reporting violations, the SEC published here and here its settlements with the two Arthur Andersen partners that planned and supervised the 2001 audit of WorldCom. Six years later, the settlements amount to little more than slaps on the wrist: both auditors were suspended from practicing before the SEC for at least three years, no monetary penalties were assessed, and no admissions of guilt were obtained. (By the way, one of the auditors has let his CPA license lapse, and the other is still licensed as a CPA in Mississippi.)

I have three questions for the SEC. First, why were these individuals allowed to settle without admitting or denying guilt in what appears to have been an open-and-shut case? Second, why were no monetary penalties assessed? Third, why did it take six years, with only this so-called “settlement” to show for all this time and, presumably, effort?

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