Accounting firm Arthur Andersen on Friday lost its license to practice in Texas, the home state of its former client Enron.
The state board that regulates the Texas accounting profession voted unanimously to revoke the once venerable firm’s license because of the company’s obstruction of justice conviction.
“Although it is tragic that a firm with Andersen’s proud history in Texas should be brought so low, the firm’s actions in the Enron case clearly warrant this result,” said K. Michael Conaway, presiding officer of the Texas State Board of Public Accountancy.
Andersen was convicted by a Houston jury in June of obstruction of justice in a federal investigation of Enron’s financial collapse. The collapse led to a December bankruptcy for the Houston-based energy trader.
Attorney Richard Forrest, who represented Andersen in the case before the state board, said the Chicago-based accounting and auditing firm was no longer practicing accounting in Texas.
Andersen had told the Securities and Exchange Commission after the verdict that it would cease auditing public companies by Aug. 31.
The company had agreed to the license revocation and a $1,000 fine, the maximum the state board could fine the company.
Since the grand jury indictment “things have of course gone badly from a business standpoint for Arthur Andersen and they have lost a lot of clients and had been winding up business and have wound up business in Texas,” Forrest said.
The board, when it publicly disclosed in May that it was trying to revoke the company’s accounting license, had said it was seeking at least $1 million in fines and penalties for several alleged violations of the law.