Andersen Agrees Settlement In WorldCom Class Action

by Glen Shapiro, LawAndTax-News.com, New York

28 April 2005

Former 'Big Five' accounting firm, Arthur Andersen earlier this week reached a settlement agreement in a class action brought against it by aggrieved WorldCom investors, who claimed that the audit firm had deliberately concealed the ailing telecoms firm's true financial state during its time as WorldCom auditor.

The $65 million payment brought to an end a five-week-long trial.

In a statement released following the announcement that the case had been settled, Andersen spokesman Patrick Dorton explained that the firm had "elected to enter this settlement solely to avoid the risks and costs associated with continued litigation, and expressly denies any liability or wrongdoing".

The accounting firm's lawyers have argued that Andersen auditors were hoodwinked by the WorldCom management team, a reading of the situation confirmed by Dorton, who observed that testimony given in the trial had "demonstrated that Andersen's auditors were victimized by a carefully designed and executed scheme by WorldCom's former management to conceal material financial information from Andersen's auditors as well as from the investing public".

However, lead plaintiff in the class action, New York state comptroller Alan Hevesi announced on Tuesday that anyone who feels that the settlement exonerates Andersen "should look in the mirror and say, 'What a fool I am.'"

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