then came enron. anderson did enron's books and in 2002, both companies went down in flames. a man who rose and fell with the firm's fortunes wrote about the experience. the book is, "and you thought accountants were boring - my life inside arthur andersen." larry katzen this is your story in your 35 years at the firm. and you essentially say anderson's collapse was not the result of standard government prosecution but persecution. > >that is correct. if you would ask most people what they thought about arthur andersen during that enron situation, to this day they would say, we screwed up the audit. when in fact, there has not been one bit of evidence that shows there was anything wrong with the audit performed at enron. > >the guilty verdict that the government won was in fact overturned by the u.s. supreme court. but that image though of shredding papers, of concealing e-mails, of sloppy auditing. that's the impression. > >right. and in fact we did shred papers but these were all to-do's and drafts and documents that didn't support the audit. and that is required by every a

into two so instead of having a full service accounting firm like arthur andersen involved in the enron scandal where they had to go after and say well your accounting business of what you do is committing fraud so we're going to have to shut you down they say they outsource their fraud to a consulting firm which they have an intimate relationship with and then they have the consulting firm commit all the fraud but this the effect is the same for diluting. p.m.g. and arthur andersen and the whole group of them commit this massive fraud as part of a conspiracy colluding with the rating agencies in the banks so they go into one in particular case for deloitte and this is in florida's miami dade county school officials fired deloitte in two thousand and nine part way through an eighty four million dollar contract to overhaul the district's computer system after paying to light thirty million and having virtually nothing usable they could rescue superintendent albert viro fired them he said after much review the best thing to do was terminate deloitte and we did with a vengeance we cut out

all that if you remember when sarbanes oxley was put in at force in two thousand and two after the enron failure and arthur andersen's involvement in and run failure they said never again will you have an audit firm that was conflicted that was doing to manage work for their clients such that they lost sight of their responsibility for out it but in the tank plus years that we've had since then nobody's enforcing those rules nobody isn't forcing those restrictions and so the firms have gone all right back to where they started and actually probably even better delight never stops the other three firms had to rebuild after selling or consulting firms and waiting for their known competes to to expire yeah we mentioned this in the first half of the show citing the example of enron and arthur andersen so here you had an accounting firm that was wrapped up in massive fraud there was some kind of action and sarbanes oxley and then you've got the lawyer just ignoring this completely they are separating their businesses to avoid complying with any kind of reasonable standard of accounting and al

all that if you remember when sarbanes oxley was put in at force in two thousand and two after the enron failure and arthur andersen's involvement in and run failure they said never again will you have an audit firm that was conflicted that was doing to manage work for their clients such that they lost sight of their responsibility for out it but in the tank plus years that we've had since then nobody's enforcing those rules nobody isn't forcing those restrictions and so the firms have gone all right back to where they started and actually probably even better delight never stopped the other three firms had to rebuild after selling their consulting firms and waiting for their known competes to to expire yeah we mentioned this in the first half of the show citing the example of enron and arthur andersen so here you had an accounting firm that was wrapped up in massive fraud there was some kind of action and sarbanes oxley and then you've got the lawyers just ignoring this completely they are separating their businesses to avoid complying with any kind of reasonable standard of accounting

fruitless and he broke down into public tears when he learned that enron's ken lay secretly been meeting and working with arnold schwarzenegger to help schwartz a nigger become governor and that schwarzenegger had filed his papers. and painted by today the san diego republican was rushing back out of his own dream to become governor it's nights like. this. so knowing the truth about congressman darrell i say we really want this generation's joe mccarthy leading yet another taxpayer funded which up on capitol hill let's rubble. is wednesday ready to rumble join me for a long liberal rubble chris allman conservative commentator and activist and conservative commentator and editor of the guns and patriots news letter thank you for joining because you have to disarm both so darrell i said one of the few members of congress who's been arrested one of the members of congress has been charged with like you know grand theft auto i mean literally people calling grand theft. you know there's questions about his warehouse the burned down the got his first business go on that got the money is busine

llevÓ policÍa en laapital wa guatemalteca y enconaron a 10 indocumentadondiciones inumanas tambiÉn enroncuando suestamentea vÍctima le contÓ to a su marido fue elsesi coÓ en venganza arrÓ unuchillo s lo clavo 7 veces hasta matarla, el hombre se siente arrentido. >> mÁs u docena de pacientes fueron abandonados a suerten stro, bali lifoia, oficiales paramÉdicos enconaron a eos ancianos 14 en su talidad en su mayoÍan sillas de rue andodos enl hor de cuidados sÓlo con unocino y un conserje para udars, al parecer cerraro el negocio dejaron abandonados a s paentes las autidad ahora scan a losesponss que pÍan enfrentar cargos por abuso. >> un peqÑo estÁ vivo de gro despuÉs de se atropellado por un cductor en t les advierto tne imagenes y te. >> la cÁra de seguridadrabÓ el momto en q el peeÑo lonzo go pa c conn perro enaalal y alcanzÓ b inmediatamentententÓ cruzar la rastra. guosesÉs el or un camiÓn cuer del niÑo queda tendido y a unlto l perro que regrÓ a su lado minos despuÉs en imÁgenes quedÓ ptado cuando la ambulancia llega para trladao al hospal. >> ni siquiera puso los fren >> su dre vis v

♪ sleep train ♪ you ticket to a better night's sleep ♪ you may not be able to enron the government's depending on when you log on, you may not be able to enroll in the government's new healthcare system this weekend. healthcare.gov will be unavailable for a few hours starting at 10:00 each night while they work on the technical glitches during that time, you won't be able to register for coverage. you can get general information. >>> the price for a gallon of milk could double as a result of the government shutdown. the shutdown also marked the possession police expiration of the latest farm bill. the cost to maintain livestock can outweigh farmer sales and the farm bureau says come january, farmers may pass their highest cost on to consumers. analysts expect congress to extend the law rather than agree on a new farm bill. it's unclear when that might happen. >> coming up in sports, playoff fever hits oakland. the a's take their shots early. could they come back at the coliseum? we'll find out. ,,,,,,,,,,,,,, playoffs...this year they sd it's al >>> going one on one with some of the

worldcom, enron, that's something else. those were not start-ups, but they were younger companies.ust thinking of the head office, it was still in white plains. i mean, they would let one of their kids go bankrupt? - yes. so, that was a very tough situation for them. so, maybe the answer to the question is: we're no longer called at&t; we're now called allstream. so, as a part of that process, they weren't delighted to see their name kind of move through that kind of process. and they participated, they were helpful, but at the end of it, they took their name back, and we had to rebrand ourselves as allstream and co out with a new persona in the marketplace. and for sure for us, it was a big deal to come out with a new name, but there was a loss, losing that kind of branding that comes with such a worldwide-recognized brand like that. - and this happened around the time of the so-called tech bubble. but telecommunications is a little bit different; it's more of a real business. the other stuff was more promises. - thank you for saying that. yes. - i mean, you were doing things and

worldcom, enron, that's something else. those were not start-ups, but they were younger companies.ust thinking of the head office, it was still in white plains. i mean, they would let one of their kids go bankrupt? - yes. so, that was a very tough situation for them. so, maybe the answer to the question is: we're no longer called at&t; we're now called allstream. so, as a part of that process, they weren't delighted to see their name kind of move through that kind of process. and they participated, they were helpful, but at the end of it, they took their name back, and we had to rebrand ourselves as allstream and come out with a new persona in the marketplace. and for sure for us, it was a big deal to come out with a new name, but there was a loss, losing that kind of branding that comes with such a worldwide-recognized brand like that. - and this happened around the time of the so-called tech bubble. but telecommunications is a little bit different; it's more of a real business. the other stuff was more promises. - thank you for saying that.

enron, worldcom.his great public marketplace of ours, there will always be a chance sometimes that even a company that seems completely legitimate---nq is listed on the new york stock exchange---can get through the cracks and actually be a fraud. > >let's give people some actionable tips here. so, what do you do? do you buy smaller shares? what would you do as a trader? you're a smart guy. > >i know the market's been doing great. a lot of people are in and out of hot stocks riding especially the small caps. my advice is to focus on the fundamentals. here we had some caution signs. a high flying stock, listed in china, very aggressive accounting potentially. you gotta be careful. > >matt, good to have you on the show this morning. thank you. > >you're welcome. we hope you will be back to join us tomorrow. senator judd gregg will be here to talk about how he intends to run the nation's largest lobbying trade association. find out if he has a plan to help main street prosper. from all of us at first busi

and education what's absurd is need oil barons to keep headstart afloat you heard that right an ex enron executive just pledged ten million dollars to allow the underprivileged preschool program to continue operating amidst the shutdown sham and really that's what the shutdown is one giant sham just of the suckers are us. the the. people are they are very hard to take that. long. ever had sex with her but there are those. that believe. that. this country is just days away from an unprecedented default on the debt and that might just be our easiest problem to deal with so right now america's wealth gap between the rich and the poor is the widest it's been since the great depression and although predatory corporate banks are largely responsible for the dire state of the economy not one they can executive assume inside of a jail cell obviously the current crony capitalist system is broken and are ripe for.

and education what's absurd is need oil barons to keep head start afloat you heard that right an ex enron executives.

and education what's absurd is need oil barons to keep headstart afloat you heard that right an ex enron executive just pledged ten million dollars to allow the underprivileged preschool program to continue operating amidst the shutdown sham and really that's what this shutdown is one giant sham just of the suckers are us. this is. the piece of lead it was terrible a problem very hard to take the plunge again but the money here is a plug that you never had sex with that make their lives let's let's play a. little listen.

you rachel and tiger is well right i mean well i have to tell you it is interesting i just out of enron happy home you know and he looks happy this is this you have to act as if you really had to he looks like the kind of dog that doesn't get happy if. you know what i actually did the math how much just this before tiger was became a part of my life i did come out to see how much this would cost annually and really what i didn't anticipate was how much i'd like dressing him up this is a ridiculous thing i admit this is not the best. you know they need to find a.j. i didn't find friends and i find a friend of the cost and i don't want to look at it that you know i have and it's more it's a luxury item at this point i don't think it's going to luxury items for humans i can't imagine what a luxury item they are for but what i find most interesting too a lot of the clothes that are already in the market it's not a market that it seems like it's over saturated yet because there are so many costumes that are not available and i shouldn't say costumes it's not like this is just a hole in and t

education what's absurd is needed or you'll baron's to keep headstart afloat you heard that right an ex enron executive just pledged ten million dollars to allow the underprivileged preschool program to continue operating amidst the shutdown sham and really that's what the shutdown is one giant sham just of the suckers are us. of the atlantic a. very large atlantic. county that had sat with the terror threat there. was. such. little. sleep. lately. but. this country is just days away from an unprecedented default on the debt and that might just be our easiest problem to deal with i say right now america's wealth gap between the rich and the poor is the widest it's been since the great depression and although predatory corporate banks are largely responsible for the dire state of the economy not one bank executives to me instead of a jail cell obviously the current crony capitalist system is broken and ripe for criticism but what's the alternative one man co-developed a new economic theory called participatory economics or para con his name is michael albert and he joined me earlier to break d

education what's absurd is needed an oil barons to keep headstart afloat you heard that right an ex enron executive just.

morgan on the boss and let the stock go to zero like enron or world com like the dangerous ponzi scheme that is absence i know i'm not saying that it's because ultimately the financial markets if everybody's willing to ascribe a value to it then it doesn't really matter what you're talking about here is a central bank has negative equity when you actually do this central bank basically loses enormous amount of value now if you don't correct it with a lot of thinking you're saying these actual collateral these bonds of no value because a central bank issuing them hasn't got any substance but the real issue is we can all pretend that's not an issue and then we can still ascribe value to it and as long as we can keep the banks liquid because ultimately banks fail because a lack of confidence and lack of liquidity as people withdraw money as long as we can maintain that because it's more comfortable for everybody to maintain that we can keep it going they will come a movement which is the motive that you are talking about when this all on whines but we are a long way from that at the but do

morgan on the boss and let the stock go to zero like enron or world com like the dangerous ponzi scheme that is absence i know i'm not saying that it's because ultimately the financial markets if everybody's willing to ascribe a value to it then it doesn't really matter what you're talking about here is a central bank has negative equity where you actually do this central bank basically loses enormous amount of value now if you don't correct it with a lot of thinking you're saying these actual collateral these bonds of no value because a central bank issuing them hasn't got any substance but the real issue is we can all pretend that's not an issue and then we can still ascribe value to it and there's long as we can keep the banks liquid because ultimately banks fail because a lack of confidence of lack of liquidity as people withdraw money as long as we can maintain that because it's more comfortable for everybody to maintain that we can keep it going they will come a movement which is the motive that you're talking about when this all on whines but we are a long way from that at the bu

enron and worldcom, the poster child of bad corporate governance.t might just happen as a space-saving measure here. steve, i don't blame steve for this, don't think many people do. he didn't cause this stuff. one of the major reasons jpmorgan was targeted. i believe there is a political statement here to shut him up. he went after lot of the reform laws, president obama's economic agenda. the notion jpmorgan is like this bad player in the mortgage arena is absurd. the firms that were bad players like citigroup, merrill lynch, was not jamie dimon. telling people there is no changes, but can only tell you common sense dictates something would have happened, but he is standing behind his people right now. cheryl: we will keep you around. we shall charlie gasparino. 31 minutes until the bell rings. supplies for the next decade. is this deal going to put them on top of the tech world? we will ask coming up. plus we will brin breakdown the biggest movers for you. my mantra? always go the extra mile. to treat my low testosterone, i did my research. my doc

citigroup paid marginal fines on enron and worldcom.ss action, 4 and 6. 4 worldcom, 6 enron. i check my math but multiple billions for both. that was more than the regulatory fine. usually when the thing works out, you get dinged big-time here. lori: is he still a democrat, jamie dimon? >> he made it pretty clear that he didn't vote for this president. yes, he is still a democrat. lori: prosecution or persecution the government crackdown on jpmorgan and jamie dimon. tweet us on fox business, your responses coming up during the hour. dennis: home sales cooling after a red hot summer. why a nearly 2% drop in sales though actually could be a good thing. lori: getting the most bang for apple buck. we'll tell what you has ipad users racing to get from apple today. ♪ @?? stick with innovation. stick with power. stick with technology. get the flexcare platinum. new from philips sonicare. >> i'm melissa francis with your fox business brief. world while shipments of tablets, phone, and pcs will grow by 4.5% this year from 2012. according to an

and if we can convict enron for fraud, we ought to be convicting everybody in washington for fraud. the national debt -- the debt that your children will children will pay back rose by $528 billion last year. you go in any government public organization, and they will talk about the deficit. which is one part of the set of the books. but they never talk the truth in numbers. and being an accountant by training, you know, you're taught to account for all the number, not the ones that help you. and all the numbers. and the fact is that that is a characteristic of the lack of leadership in washington, of being honest of the real problems in front of us, and the problems are severe, and they're not unsolvable and our hope is great, our future is great if we address the problems we have and do it from a position that says that the problem in our country is more important than anything about my political career. and when we have sacrificial leadership among our politically elected leaders we'll get back on course as a country and we'll get back the very reputation that we deserve, which i

in the wake of the enron crisis, there was a great deal of reticence and government about bringing in wall street people to serve in government. their reputations had fallen so low. i thought, we find somebody of integrity in whom people on both sides of the aisle can have confidence. wood, maybe will be lucky to get through the next three years without a financial crisis but we will be the first one to have. he was a tough sell. i went straight in the front said, we are starting to look at who can replace john snow as treasury secretary. the president would like to consider you. who gets approached for that kind of thing is going to be flattered but his reaction was, not really. he was sitting on top of the world. he was the leader of what at the time was possibly one of the most successful financial enterprises in the history of mankind. he is not a mercenary guy at all. but he is success-driven. he was a successful leader of the most successful financial institution may be the history of the world. >> he was worth 700 million dollars at least? >> probably. if you know hank, you kno

having made a quarter of a billion dollars for enron about a decade ago, he left just before the company fell and he started his own hedge fund company through which he has become a billionaire. host: so the headline to this story says that he and his wife, laura, donated $10 million for head start. can you fill in the details? guest: well, the couple pledged $10 million to fill in the gap for head start programs across the country. that have lost their funding on october 1 or in jeopardy. what they have done, they given a no interest gap loan or forgivable loan so that program that's were depending on federal funding for last week's expenses, don't have to remain shut down. seven programs in six state, most of the states are in the south, had to shut their doors last week. most of those program have brought the children back in today. host: does the money come from a foundation or does it come from his personal wealth? guest: mr. arnold and his wife laura who have a private houston-based foundation called the laura and john arnold foundation. this particular loan was provided from them

. >> "should we invest all of our 401(k) in enron stock?" absolutely. don't you guys agree?crowd laughing) >> smith: for savers like debbie skoczynski, who worked for comdisco, a computer leasing company, the fall would be precipitous. >> i was close to a half-million dollars i had in my 401(k) with company stock. you know, it was like, "wow, look at all the money we have. "look at what is happening. you know, i can retire probably when i'm 45." >> the dot-com failures continue to mount... >> smith: skoczynski not only lost her savings, she lost her job. >> comdisco today filed for chapter 11 bankruptcy protection, including another 200 job cuts. >> they joined a who's who list of corporate bankruptcies. >> the day i got laid off, i lost it. i thought, "oh, my god, i'm a single parent. "i have no job. "i have a house, i have a house payment. what do i do?" you know, and... i was scared. really scared. i didn't have much of a retirement left. i couldn't even borrow against it. and it was just something that i never foresaw ever, you know, losing my job, ever. never. >> smith:

versus election and the decision by the supreme court, the financial crisis, you can talk about the enron scandal, you can talk about guantanamo and abu ghraib. there are a lot of things that make america the greatest country in the world. it's the largest economy where people want to come. they're not trying to swim from miami to cuba. they're coming the other way. that's still true. but america's ability to talk about its exceptional values, its indispensability is met with derision internationally and the chinese government is more than happy to write articles in their state media in the last two days talking about deamericaization that is hurting america's value projection. >> i think we've taken a hit and that would cost us potentially in basis points of it interest, but the issue out there, which has been really true for the last several years, there is an alternative. europe really fumbled the ball when it came to the possibility of creating a global reserve alternative. china is nowhere close to having that level of trust. so i think we sneak by by default here and i don't mean th

just have to they just have to enforce the law you know they have to do with george bush did after enron and adelphia and world com they have to go in and march into some of these offices and take some people out bracelets that's the only way this thing. morally gets gets gets resolved there are people who committed very serious crimes and they're not going to be punished for it and i think i think the what they're really trying to do with the government right now the department of justice are trying to find this sweet spot where they can allow all of their political allies on wall street to somehow stay in business in avoid being wrapped up in criminal investigations but they cannot but they can also turn around and say to the public look we did something we did something substantial which is only the sorich and that's what this big number is all about i think you're absolutely right one final question matt what would you rather see if you had your choice the red sox win the world series on wednesday night or jamie dimon go to jail. give me a very different i can't admit to the real ans

enron able to convince hong kong regulators to waive rules regarding partner should structure. billion. ashley: it is quarter till. as we do every 15 minutes, let's get to the floor of the stock exchange. mark newton joining us. as always thank you. the markets are loving progress in d.c.. >> almost 2%. we haven't given back anything from earlier highs. brett is impressive at 6:1, positive for every one negative and volume is said to be 90%, advancing and declining, an impressive balance that anyone is happy about, we have fallen 12 of the last 15 days and given back 4% but this time the decline from september feels very much like what happened in august and may. as it reached any technical levels, there will be a showing as a vehicle everyone is focused on these levels from late august and if congress and the senate can get together and make progress on the debt ceiling that would give the mark a little bit more boost and end october exploration which could be a bottom wrestle the news type of thing, momentum is still very negative and october dangerous month historically if y

>> enron employees -- scrucci kept hiring cfos that were familiar with extraordinary -- >> it's not his fault. mohammed is up. what time is it out there? >> 3:00 a.m. >> the baseball season is over for both of us. >> and he's already working the e-mail. >> he's just saying you look okay despite the -- i'm not disappointed with the reds. the pirates won four out of five. that's like a seven-game series. even though they lost last night's one-game wild card -- they just lost. they don't deserve to go. you can't score more than two runs every game. i saw one home run that would have been a home run that was foul bid a foot. >> you stayed up late to watch it? >> i was going in and out. and then i saw guys on first and second and then they scored one run and then a home run -- what looked like a home run was fouled by less than a foot. and it would have been 4-3, but they probably would have lost. i'm over it because the pirates deserve it. and i will say that unequivocally because the kicked the reds -- yeah, earned success. they won four out of five. i'm fine. i'm more disappointed about t

one example we use is a man who was looking like he was going to be the head of enron and now worth $100ver and the structure allows you to not pay as much tax and get out of the regulation that everyone else has to follow. >> it's a fascinating dynamic where they look at the energy. the mlps, even though they are keeping profits, they are part of what helped build this boom in the country. some people look at it as rich getting richer and others say this is part of what is good about the energy boom. >> it's both. to some extent it's rich people who invest and on the other hand it's a new way of investing. you would like to have more ways to do these things, but the thing that strikes us is you don't want to end up with tax being the main reason. it feels strange to have companies that pay out all their profits. what's happening is american capitalism is being warped. sometimes in a good way, but slightly worrying way. >> that twists incentives. >> it was weird to imagine you look at the dow jones and a huge amount of what's happening in america is not even remotely that. that's a big p