I had to double check all my calendars today because I’m starting to feel like it’s 2001 all over again. The culprit of the moment is this New York Times article which states:
A sweeping five-month investigation into the collapse of one of the nation’s largest subprime lenders points a finger at a possible new culprit in the mortgage mess: the accountants.
New Century Financial, whose failure just a year ago came at the start of the credit crisis, engaged in “significant improper and imprudent practices” that were condoned and enabled by auditors at the accounting firm KPMG, according to an independent report commissioned by the Justice Department.
My advice to KPMG: destroy evidence. Do it now, before they find something completely innocent and turn it into a felony. Shred like you’ve never shredded in your life. Take sledgehammers to your servers. Set fire to every paper document you can find. Leave your offices, taking with you everything you can carry. Shred your personal cell phone bills. Move to a new town. Scorched earth is good.
This is only the beginning of a second wave of “improper business practices” crackdown, and anyone who believes that innocence will triumph over the zeal of federal prosecutors on the hunt to make a name for themselves is seriously naive, if not deluded.
This is exactlythe setup for Arthur Andersen, and that eighty-five year old accounting firm didn’t make it out alive. Oh sure, the Supreme Court unanimously overturned every AA conviction, but it was far too late for the company, and the people who worked there. I sincerely hope KPMG makes it through this intact, but after witnessing what happened to Enron and Arthur Andersen, my skepticism is infinitely high.