Examiner Slams Banks, Auditors on Enron

HOUSTON -- A report by a bankruptcy examiner has concluded that employees at Bank of America and Royal Bank of Canada, as well as auditors at KPMG and PricewaterhouseCoopers (PwC) helped certain Enron Corp. officers breach their financial duties and turned a blind eye to problems on transactions they helped create, The Associated Press reported Friday.

In his report, which was prepared Nov. 14 but was first made public Thursday, Goldin concluded that Bank of America and Royal Bank of Canada helped certain Enron officers set up transactions, "designed to provide Enron with off-balance sheet funds and to permit Enron officers to manipulate Enron's publicly disclosed financial information in a materially misleading way."

With regard to KPMG, Goldin said a fact finder could conclude that the auditor had actual knowledge of former Enron chief financial officer Andrew Fastow's unauthorized personal benefits from deals he helped set up and "was, at a minimum, willfully blind to the fraudulent nature" of those transactions.

The examiner's report also concluded there is sufficient evidence to show that PwC "committed professional malpractice and was grossly negligent in preparing and providing" opinions about several Enron transactions.

UBS Warburg, Bank of America, Royal Bank of Canada, KPMG and PwC did not immediately return telephone calls from The Associated Press seeking comment late Thursday.

-- NYSSCPA.org News Staff

Posted on 12/5/03