United States v. Anderson
The Arthur Anderson v. United States, 554 U.S. 696 (2005), case happened in the year 2005. It was a case involving the United States Supreme Court where the Court overturned a conviction of the accounting firm Arthur Anderson. The firm had a previous conviction involving obstruction of justice and the Supreme Court overturned the decision on the basis that the instructions offered by the jury did not properly show which law the company had broken. When the Enron Company fell, Arthur Anderson was its accounting firm. The Accounting firm issued instruction to its staff to destroy all the documents that related to its former client, Enron. This move was after the Anderson staff realized that they would be investigated concerning the issue by the Securities and Exchange Commission.
It was on the 6th of May 2002 when the company Arthur Anderson was charged with obstructing official proceedings of the Securities and Exchange Commission. The charge was filed in the United States District Court for the Southern District of Texas. Michael Chertoff, the then Secretary of Homeland Security, served the indictment to the Anderson Company. The Company was found guilty by the jury on June 15 of the same year. The Company was then forced to surrender its CPA certificate since convicted felons are not allowed to audit public companies by federal regulations. The license was surrendered on August 31st of the same year and this meant that the firm would go out of business, at least in the United States. The company then filed an appeal to the United States Court of Appeals for the Fifth Circuit, a court that affirmed the previous decision made by the district court. The company then petitioned for a writ of certiorari to the Supreme Court and indeed, it was granted (Moller, 2005).
The main issue on the case was concerning the jury. The question was whether the jury had properly displayed the law, which Anderson had been charged with violating. The company had been charged under 18 U.S.C. ~ 1512 sections (b) (2) (A) and (B). This meant that it was a crime involving the knowing and corrupt persuasion of a person with the intention of making the person withhold or alter documents that are to be used in an official legal proceeding. The company however believed that improper instructions were given to the jury since the jury was told to convict regardless of the petitioner’s belief that its actions were lawful. The Supreme Court held that the information was not true since the statute they had been charged under read that the accused had to have knowingly and corruptly persuaded. The company indeed instructed its staff to perform the destruction of the files but the action was within their retention of files policy. The company was not corruptly keeping the information private even from the government since the document retention policy for audit firms was constructed for this purpose (Samaha, 2010).
It was a unanimous decision by the Supreme Court to overturn the conviction of the Arthur Anderson Company. The then Chief Justice William Rehnquist wrote this opinion and received backing by all the associate justices. The view of the court was that indeed the instructions handed to the jury allowed it to convict the firm without proving that it knew it had actually broken the law or that they had interfered with any legal proceeding that could prohibit the destruction of such documents. The Court however stated that the instructions were vague and they failed to show that Anderson knew they were breaking the law. Rehnquist said that the instructions required very little responsibility and the definition of the crime that Anderson is supposedly said to have committed is not in the law. The Chief Justice said that only a person who knows they are doing wrong could be said to have knowingly and corruptly persuaded. The company has however greatly suffered from when this suit happened since their client base dropped significantly.
References
Moller, M. K. (2005). Cato Supreme Court Review, 2004-2005. New York, NY: Cato Institute.
Samaha, J. (2010). Criminal Law. New York, NY: Cengage Learning.
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