Regulatory and Legislative Responses
to the Enron Scandal
Peter A. Pease
Attorney-at-Law
Berman DeValerio Pease Tabacco Burt & Pucillo, LLP

Accounting fraud cost investors $200 billion over the last six years, according to attorney Peter Pease, and fraud investigations have tripled this year. In response, Pease says we can expect changes in the ways regulators monitor the accounting industry—but on a schedule that may take longer than some pension fund managers would like.

Pease noted that concerns about financial accounting problems were heard long before Enron became front-page news. Former SEC Chairman Arthur Levitt, for example, warned as early as 1998 that pressure to report dividends and boost stock options were leading to inadequate financial reporting.

There have been several proposals in Washington in response to the Enron scandal, Pease noted. New SEC Chairman Harvey Pitt has asked for a bigger budget to allow for greater regulatory oversight and several members of Congress have offered legislation with a wide range of proposals.

Pease suggested that many of these proposed responses are inadequate. He encouraged NCPERS’ members to get involved, contact their members of Congress and support real reform in Congress. “Your investments are at stake,” Pease said, “and your opinions can make a difference.”

Pease has spent 25 years litigating cases under federal securities and antitrust laws, and state unfair or deceptive trade practices laws. He is a graduate of the University of Denver and Suffolk University Law School.