FYI - 

 -----Original Message-----
From: 	Iannarone, Lauren  
Sent:	Friday, November 02, 2001 9:46 AM
To:	McKalip-Thompson, Catherine
Subject:	anderson

06/20/2001 The Globe and Mail Metro B13 "All material Copyright (c) Bell Globemedia Publishing Inc. and its licensors. All rights reserved." WASHINGTON -- The U.S. Securities and Exchange Commission, in one of the first fraud cases ever filed against a Big Five accounting firm, fined Arthur Andersen LLP and three partners more than $7-million (U.S.) in connection with audits of Waste Management Inc.'s annual financial results. 
In a complaint filed in U.S. District Court here, the SEC alleged that Arthur Andersen and its partners allowed Waste Management to continue for several years a series of improper accounting practices that inflated the garbage-hauling concern's earnings. The complaint alleges fraud on the part of three audit partners assigned to the Waste Management account: Robert Allgyer, 56 years old, of Lake Forest, Ill., who has retired; Walter Cercavschi, 45, of Harwood Heights, Ill.; and Edward Maier, 54, of Chicago. 
Arthur Anderson agreed to pay the fine to settle the case, but the firm and the auditors don't admit or deny the allegations. Among the audit partners, Mr. Allgyer agreed to pay $50,000, Mr. Maier, $40,000, and Mr. Cercavschi, $30,000. Arthur Andersen agreed to pay $7-million.  As part of a campaign to curb what it sees as growing accounting fraud, the SEC has broadened a number of investigations of companies' earnings reports to include audit work done by outside accountants.  In bringing the first fraud case against any audit firm since 1985, SEC enforcement chief Richard Walker said the action "helps to underscore the importance of auditors as gatekeepers to our capital markets and shows the SEC won't shy away from making auditors comply with their responsibilities."  Under a related administrative proceeding filed yesterday alleging professional misconduct, the SEC also censured Arthur Andersen, the three audit partners and a fourth partner, Robert Kutsenda, who was the regional audit director at the time of the alleged violations. As part of the censure, the four audit partners are barred from doing accounting work for public companies for a period of one to five years.  "This settlement allows the firm and its partners to close a very difficult chapter and move on," said Terry Hatchett, Arthur Andersen's managing partner-North America. "The SEC has not questioned the underlying quality or effectiveness of our overall audit methodology, nor has the SEC limited our ability to conduct audits for other public companies."  An attorney for Mr. Allgyer declined to comment. Attorneys for Mr. Maier, Mr. Cercavschi and Mr. Kutsenda didn't return phone calls.  Waste Management said it "has co-operated fully with the SEC in the investigation, and does not believe that the SEC will seek any action against Waste Management in connection with the events detailed in the Arthur Andersen settlement."  The Waste Management accounting scandal stands out for it size and breadth. After a board-led probe turned up years of questionable accounting, the company took a $3.5-billion charge in 1998, and since then the trash hauler and Arthur Andersen agreed to pay $220-million to settle shareholder litigation in the matter.  The company admitted it had overstated its pretax earnings by $1.43-billion in 1992 to 1996 -- the biggest restatement in SEC history. Neither Waste Management nor any of its employees have been disciplined by the SEC. The SEC said yesterday that the investigation continues.  Within the SEC, the Arthur Anderson investigation became a centrepiece of the commission's aggressive campaign to demonstrate that conflicts of interest can be caused by consulting and other non-auditing services that numerous accounting firms now routinely offer audit clients.