Arthur Andersen LLP v. United States, 544 U.S. 696 (2005)

Energy conglomerate Enron Corporation enlisted Arthur Anderson LLP to audit the statements that it publicly filed and review its internal accounting practices. In response to the serious crisis in which Enron later found itself, Arthur Anderson compiled a team of investigators who worked with in-house counsel at Enron, Nancy Temple. Temple was aware of the likelihood that the SEC would investigate Enron's practices. She asked that Arthur Anderson be reminded of the document retention policy at Enron, of which employees were informed during a general training course. Temple notified the Arthur Andersen team when the SEC sent it a notice of investigation, and she attached the document retention policy to the email. She also reminded them about the policy during a conference call on the following day. In two later meetings, her supervisor stressed the importance of complying with the policy. Despite these repeated reminders, many paper and electronic documents were destroyed, including for a week after the SEC opened its formal investigation. When the SEC finally subpoenaed the documents, Arthur Andersen was indicted for violating laws against the obstruction of justice under 18 U.S.C. Section 1512. These prohibit knowingly corrupt persuasion of persons that is intended to cause them to withhold documents from a government investigation. Arthur Andersen was convicted in the trial court.

Whether the jury instructions in a conviction for "corrupt persuasion" under 18 U.S.C. §§ 1512(b)(2)(A) and (B) properly conveyed the elements required for such a conviction.

The judgment is reversed.

Arthur Andersen's ability to avoid liability because of the vague jury instructions likely spurred Congress to enact the Sarbanes-Oxley laws that criminalized this type of conduct more specifically. The accounting firm was destroyed by the negative publicity, notwithstanding the reversal of the conviction.