Andersen v. U.S.: Policy Implications and a Social Science Research Agenda

ABSTRACT

The U.S. Supreme Court overturned the conviction of Arthur Andersen, LLP for its involvement in the Enron scandal. The Court held that that the jury instructions did not accurately convey the meaning of the witness tampering statute that Andersen was charged with. Since the original trial, relevant sections of the Criminal Code were updated with the passage of the Sarbanes-Oxley Act (2002). Although Andersen was convicted under the pre-Sarbanes-Oxley statutes, the Court’s ruling will likely affect enforcement of post-Sarbanes statutes, possibly limiting their scope. We discuss whether Sarbanes was an appropriate response to corporate crime and consider some other methods of punishing corporations. We also raise a number of empirical questions related to this case.

Keywords: