U.S. Securities & Exchange Commission
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U.S. Securities and Exchange Commission

Before the

Securities Exchange Act of 1934
Release No. 50664 / November 15, 2004

Accounting And Auditing Enforcement
Release No. 2135 / November 15, 2004

Admin. Proc. File No. 3-11737

In the Matter of

Wesley H. Colwell, CPA,





The Securities and Exchange Commission (the "Commission") deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted against Wesley H. Colwell ("Respondent" or "Colwell") pursuant to Rule 102(e)(3)(i) of the Commission's Rules of Practice.1


In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement (the "Offer") which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party, and without admitting or denying the findings herein, except as to the Commission's jurisdiction over him and the subject matter of these proceedings, and the findings contained in Section III., below, which are admitted, Respondent consents to the entry of this Order Instituting Administrative Proceedings Pursuant to Rule 102(e) of the Commission's Rules of Practice, Making Findings, and Imposing Remedial Sanctions ("Order"), as set forth below.


On the basis of this Order and Respondent's Offer, the Commission finds that:

A. Colwell, age 44, joined Enron in late 1999 and in February 2000 became Chief Accounting Officer of Enron North America (ENA), home to Enron Corp.'s oil and gas trading business. Colwell remained in that position until January 2002, when UBS Warburg Energy Services LLC purchased ENA's business. At all relevant times, Colwell was a certified public accountant licensed to practice in the States of Texas and Oklahoma.

B. On October 9, 2004, the Commission filed a complaint against Colwell in the United States District Court for the Southern District of Texas, entitled SEC v. Wesley H. Colwell, (Civil Action No. H-03-4308). On October 20, 2004, the court entered its Final Judgment against Colwell, which, among other things, permanently enjoined Colwell, by consent, from future violations of Sections 10(b), 13(a), 13b(2) and 13(b)(5) of the Securities Exchange Act of 1934 ("Exchange Act"), and Rules 10b-5, 12b-20, 13a-1, 13a-13 and 13b2-1 thereunder. The court also ordered Colwell to pay $275,000 in disgorgement, prejudgment interest of $25,000 and a civil money penalty of $200,000, for a total of $500,000.

C. The Commission's complaint alleged, among other things, that Colwell, in coordination with other Enron employees, manipulated Enron's publicly reported earnings through a variety of devices designed to produce material false and misleading financial results, including misuse of reserve accounts, concealment of losses, inflation of asset values, and deliberate use of improper accounting treatment for transactions.


In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanction agreed to in Respondent Colwell's Offer.

Accordingly, it is hereby ORDERED, effective immediately, that:

A. Colwell is suspended from appearing or practicing before the Commission as an accountant.

B. After four years from the date of entry of this Order, Respondent may request that the Commission consider his reinstatement by submitting an application (attention: Office of the Chief Accountant) to resume appearing or practicing before the Commission as:

  1. a preparer or reviewer, or a person responsible for the preparation or review, of any public company's financial statements that are filed with the Commission. Such an application must satisfy the Commission that Respondent's work in his practice before the Commission will be reviewed either by the independent audit committee of the public company for which he works or in some other acceptable manner, as long as he practices before the Commission in this capacity; and/or
  2. an independent accountant. Such an application must satisfy the Commission that:
    1. Respondent, or the public accounting firm with which he is associated, is registered with the Public Company Accounting Oversight Board ("Board") in accordance with the Sarbanes-Oxley Act of 2002, and such registration continues to be effective;
    2. Respondent, or the registered public accounting firm with which he is associated, has been inspected by the Board and that inspection did not identify any criticisms of or potential defects in the respondent's or the firm's quality control system that would indicate that the respondent will not receive appropriate supervision or, if the Board has not conducted an inspection, has received an unqualified report relating to his, or the firm's, most recent peer review conducted in accordance with the guidelines adopted by the former SEC Practice Section of the American Institute of Certified Public Accountants Division for CPA Firms or an organization providing equivalent oversight and quality control functions;
    3. Respondent has resolved all disciplinary issues with the Board, and has complied with all terms and conditions of any sanctions imposed by the Board (other than reinstatement by the Commission); and
    4. Respondent acknowledges his responsibility, as long as Respondent appears or practices before the Commission as an independent accountant, to comply with all requirements of the Commission and the Board, including, but not limited to, all requirements relating to registration, inspections, concurring partner reviews and quality control standards.

C. The Commission will consider an application by Respondent to resume appearing or practicing before the Commission provided that his state CPA license is current and he has resolved all other disciplinary issues with the applicable state boards of accountancy. However, if state licensure is dependant on reinstatement by the Commission, the Commission will consider an application on its other merits. The Commission's review may include consideration of, in addition to the matters referenced above, any other matters relating to Respondent's character, integrity, professional conduct, or qualifications to appear or practice before the Commission.

By the Commission.

Jonathan G. Katz


The Commission, with due regard to the public interest and without preliminary hearing, may, by order, ... suspend from appearing or practicing before it any ... accountant ... who has been by name ... permanently enjoined by any court of competent jurisdiction, by reason of his or her misconduct in an action brought by the Commission, from violating or aiding and abetting the violation of any provision of the Federal securities laws or of the rules and regulations thereunder.


Modified: 11/15/2004