In a September 1998 speech at New York University, former SEC Chairman Arthur Levitt announced a crackdown on accounting fraud. In his speech, Chairman Levitt criticized what he described as a “game of nods and winks” practiced by managers, auditors, and analysts who operate in a “gray area where the accounting is being perverted.” The result of this “game,” according to Chairman Levitt, was an environment where “integrity in financial reporting is under stress” and, in some instances, “earnings reports reflect the desires of management rather than the underlying financial performance of the company.”[1]�
In the few years since Chairman Levitt’s speech, accounting fraud has emerged as a top enforcement priority for both the SEC and federal prosecutors. The crackdown has resulted in a string of high-profile SEC enforcement actions, sometimes accompanied by parallel criminal indictments. In May 2001, for example, the SEC filed civil enforcement charges against Albert J. Dunlap, the well-known former chairman and CEO of Sunbeam Corporation; other Sunbeam executives; and a partner in the “Big Five” accounting firm who supervised the audits of Sunbeam’s financial statements.[2]� A number of prominent accounting-fraud cases preceded the Dunlap action, and others have followed on its heels.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
