U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17270 / December 13, 2001
Securities and Exchange Commission v. Andrew S. Fastow, Case No. 1:01MS00456 (ESH) (D.D.C. December 12, 2001)
SECURITIES AND EXCHANGE COMMISSION FILES
The Securities and Exchange Commission today announced that on December 12, 2001, it filed a subpoena enforcement action in U.S. District Court for the District of Columbia against Andrew S. Fastow, the former Chief Financial Office, of Enron Corp. Pursuant to a subpoena issued on October 31, 2001, Mr. Fastow was obligated to appear for testimony before the Commission staff at 9:30 a.m. on December 12, 2001. Mr. Fastow, instead, chose not to appear, and instead informed the Commission staff, through counsel, that he would not appear as required by the subpoena. Accordingly, the Commission filed its Application For An Order To Show Cause And For An Order Requiring Obedience To Subpoena, along with a supporting Memorandum and Declaration.
In its Application and supporting filings, the Commission alleges that on October 30, 2001, the Commission issued its Order Directing Private Investigation and Designating Officers to Take Testimony ("Formal Order") in this investigation. The Formal Order authorizes the staff to conduct an investigation into whether, among other things, Enron or certain persons and entities associated with Enron misstated or caused the misstatement of the financial condition and results of operations of Enron and disclosures related thereto, and whether such persons and entities violated the anti-fraud provisions of the federal securities laws in connection with the purchase or sale of Enron's securities. According to the Commission, as the former CFO of Enron, and a central figure in Enron's business affairs and its related party transactions with certain limited partnerships, Mr. Fastow is relevant to matters under investigation, and his testimony may provide evidence as to whether he or others violated the federal securities laws.
In its Application, the Commission alleges that on October 31, 2001, the Commission staff issued and served a subpoena to Mr. Fastow requiring him to produce certain documents by November 7, and to appear for testimony on November 14, 2001. On November 7, Mr. Fastow produced certain documents that he previously had given to the Enron Special Committee. Since then he has not produced any other documents requested by the subpoena. Moreover, in a series of meetings and telephone calls in the two weeks following issuance of the subpoena, Mr. Fastow's attorneys requested a postponement of Mr. Fastow's testimony. The Commission staff granted this request, and on November 18, counsel for Mr. Fastow agreed that he would appear for testimony on December 12 and 13. Thereafter, Mr. Fastow's counsel sought a further postponement of Mr. Fastow's testimony scheduled for December 12, so that he could provide an interview on the 12th to a federal criminal authority. The Commission staff granted this further postponement, with the understanding that the Commission staff would participate in this interview in lieu of Mr. Fastow's testimony obligation set for the same date and that his testimony before the Commission would be required on the 12th should the interview not take place. On December 6, the federal criminal authority cancelled Mr. Fastow's interview, and the following day, the Commission staff reminded Mr. Fastow's counsel that cancellation of the interview did not relieve Mr. Fastow of his obligation to appear for testimony on December 12. In fact, Mr. Fastow did not appear for testimony as required on the 12th.
Pursuant to its Application, the Commission is seeking an Order directing Mr. Fastow to show cause why the Court should not enter an Order requiring his appearance for testimony, and an Order requiring Mr. Fastow to comply fully with the subpoena for testimony and documents.