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U.S. Securities and Exchange Commission

Speech by SEC Staff:
Press Statement Regarding Settlement in
SEC v. Andrew S. Fastow


Linda Chatman Thomsen

Deputy Director, Division of Enforcement
U.S. Securities & Exchange Commission

Washington, D.C.

January 14, 2004

Good afternoon.

I would like to begin by congratulating the Department of Justice, the Federal Bureau of Investigation and especially the members of the Department of Justice's Enron Task Force for the extraordinary actions they just announced.

I would also like to echo and underscore Mr. Comey's sentiments about the working relationship between the SEC and the Enron Task Force by saying that ours has been a true, and terrific, partnership.

Today the Commission has also resolved its pending case against Andrew Fastow, Enron's former Chief Financial Officer, which the Commission filed against him approximately one year ago.

Under the terms of his settlement with the Commission, Mr. Fastow will be enjoined permanently from violating the federal securities laws, and will be barred permanently from acting as an officer or director of a public company.

Mr. Fastow will also be disgorging ill-gotten gains, represented by the over $23 million he is forfeiting as part of his criminal plea agreement. Mr. Fastow has agreed to cooperate with our ongoing investigation of Enron, and gives us a first-hand account of what happened at the highest levels of the company.

For several years, Mr. Fastow and other of Enron's quote unquote stars used their considerable talents in the service of corruption and greed. Enron shareholders entrusted them with building a legitimate business; instead they created a fraudulent enterprise that collapsed with devastating results.

A little over a year ago, when the Commission filed its complaint against Mr. Fastow, we said that it was among the first in a series of actions intended to hold accountable the persons responsible for Enron's collapse, to compensate their victims, and to restore confidence in our markets. Today's events mark significant steps in our steady march toward reaching those goals.

As of today, the Commission has filed 11 separate enforcement actions in connection with Enron's collapse.

The two dozen defendants and respondents named in those actions now include four major financial institutions, Enron's former Chief Financial Officer, its former Treasurer, and 10 other former senior Enron executives. And we are not done.

Today's events should send a message to anyone who believes that lying, cheating and stealing are effective means toward personal success - no matter how clever you are or how sophisticated your schemes are, we will deconstruct your most complex schemes, and we will hold you accountable.



Modified: 01/14/2004