Asymmetrical Information

Andersen is walking away from

Andersen is walking away from talks with the feds, refusing to plead guilty to anything.

Which makes sense. What can the feds offer the partners? No matter what they do, I'm pretty confident that every single Andersen partner is going to be stripped of all his/her assets in shareholder lawsuits -- unless a judge somehow moves to protect less senior partners in distant practices from the one that gave a pass to Enron. Which would be fair, in my opinion, since the junior folks in Seattle didn't have any idea what was happening in Houston -- but I don't know how likely it is. At any rate, the senior partners who are doing the negotiating are most probably going to have their pockets turned out for every last dime no matter what they do, so why settle with the feds? Those who aren't linked to the shredding order aren't going to see jail time anyway, and I doubt they feel so kindly to the partners who were involved that they're interested in undergoing financial and legal pain in order to spare them the rigors of life in one of our many penal institutions.