Arthur Andersen: Good News and Bad News

The good news for Arthur Andersen is that the Supreme Court seems to be siding with its challenge to the law that led to its collapse. The bad news is that the firm has already been flogged in public and has already been entirely dismantled.

Several justices seemed unsympathetic to the Justice Department's argument that Andersen violated a federal witness-tampering statute when one of its lawyers reminded employees about its document retention policy in October 2001, just before the spreading Enron scandal enveloped Andersen, Enron's accounting firm.

The prosecution of Andersen led to its virtual demise: The firm shrank from 28,000 employees to several hundred. The company was fined $500,000. The 5th U.S. Circuit Court of Appeals upheld the verdict and the jury instruction about the meaning of the law, setting the stage for high court review. No Andersen officials were ever prosecuted for violating securities laws.

Sorry about that, guys. It looks like you did nothing wrong after all. Oh well.