What does the Supreme Court’s decision to overturn Andersen’s conviction mean? And will it change the outlook for other executives in trouble with the law?

“Today’s verdict is wrong…The reality here is that this verdict represents only a technical conviction.” So reads a statement Arthur Andersen issued back on June 15, 2002, just after a Houston jury found the accounting firm guilty concerning its actions in the Enron affair.

Technical though it may have been—Andersen was convicted not for abetting accounting fraud at Enron, and not even for destroying documents, but rather for the actions of the firm’s general counsel, which the jury ruled had “corruptly persuaded” another employee to destroy evidence—the decision effectively put Andersen out of business.

Fast forward three years to yesterday, when news broke that the U.S. Supreme Court, in an unanimous and remarkably rapid decision, has overturned Andersen’s conviction.

Chief Justice William Rehnquist wrote that the judge’s instructions to the jury “simply failed to convey the requisite consciousness of wrongdoing” and “diluted the meaning of ‘corruptly’ such that it covered innocent conduct.” In other words, the Supreme Court ruled that to be found guilty, Andersen officials had to know they were doing something wrong. That is contrary to the instructions Judge Melinda Harmon originally gave the Houston jury. She told them the firm could be convicted even if it believed its conduct was lawful.

Although in a very practical sense, the decision is meaningless—it’s too late to revive Andersen—there’s lots of speculation about what the decision means in more abstract ways. Does it mean trouble for the upcoming trial of Enron’s former chairman Ken Lay and former CEO Jeff Skilling? Will it help other convicted executives—such as Frank Quattrone and Bernie Ebbers—reverse their guilty verdicts?

Is it a setback to the attempts to cut down on corporate crime? Most legal seers are saying that there’s at least a small “yes” component to each of those questions, because the Supreme Court’s ruling makes it so crystal clear that to prove white-collar crime, you have to prove criminal intent.

While defense lawyers will be scouring the ruling, the issues—and the evidence—in every case are different. The most important question of all is, does this mean that Arthur Andersen was actually an innocent bystander to the events at Enron? And that’s where things get really complicated.

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