January 28, 2008 / 9:19 PM / 12 years ago

Former Anderson Partners Settle with SEC on Enron

WASHINGTON (Reuters) - A former Arthur Andersen partner responsible for the Enron Corp ECSPQ.PK account has settled allegations that he violated securities laws when he signed audit reports that were “materially false and misleading,” the U.S. Securities and Exchange Commission said on Monday.

For the years 1998 through 2000 accountant David Duncan was reckless in not knowing that the unqualified audit reports he signed on behalf of Andersen were materially false and misleading, the SEC said. Arthur Andersen is now defunct.

Duncan failed to exercise “due professional care and the necessary skepticism” required to ensure that financial statements for Enron, which collapsed under a string of accounting scandals, conformed to U.S. accounting rules, the SEC said.

Duncan, who did not admit to or deny the allegations, has agreed not to appear before the SEC as an accountant. A fine was not levied against him.

Duncan’s lawyer said his client has made every effort to cooperate and take the appropriate responsibility for his role as Arthur Andersen’s partner responsible for the Enron audits.

“After six years of government investigation ... it was time to get these matters behind him,” said his lawyer, Barry Flynn.

In related proceedings, three other Andersen partners — Thomas Bauer, Michael Lowther and Michael Odom — settled SEC allegations that they had each engaged in improper professional conduct in connection with their Enron work.

The three former partners, who did not admit to or deny the allegations, have agreed not to appear or practice before the agency as an accountant. They can each petition the SEC for reinstatement after two to three years.

Calls to a lawyer representing Bauer, Lowther and Odom were not immediately returned.

Reporting by Rachelle Younglai; Editing by Jeffrey Benkoe

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