Accounting & Tax

Two Ex-Partners of Andersen Cleared

Securities and Exchange Commission confronts its first split decision since William Donaldson's departure.
Stephen TaubJuly 7, 2005

The Securities and Exchange Commission has dismissed a case against two former Arthur Andersen partners who were accused of causing Spectrum Information Technologies Inc. to issue false financial statements in fiscal 1993, according to Dow Jones.

The two Republicans on the commission, Cynthia Glassman and Paul Atkins, voted for dismissal; the two Democrats, Harvey Goldschmid and Roel Campos, opposed dismissal, according to the report. The 2-2 deadlock, explained the wire service, had the effect of upholding a 2001 decision by an SEC administrative
law judge, who ruled that SEC enforcement staffers hadn’t proved their
allegations.

The commission staff had claimed that the two accounting partners, Jeffrey Steinberg and John Geron, provided advice that caused the wireless company to book about $10 million in “illusory” profits from modem-licensing deals, the wire service added. The charges were initially filed in 1998.

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“I’m obviously very pleased for Mr. Steinberg and Mr. Geron,” said Gandolfo DiBlasi, an attorney for Steinberg, according to Dow Jones.