Opinion
Master File 02 Civ. 3288 (DLC).
April 1, 2005
ORDER
Andersen objects to designations that the Lead Plaintiff has made from the July 2004 deposition of Cynthia Cooper. Cooper was the head of Internal Audit at WorldCom during the period at issue in this trial. The following rulings address Andersen's objections to the Lead Plaintiff's designations.
The principal area of dispute is testimony about the several factors that prompted Internal Audit in the Spring of 2002 to begin to perform financial audits, instead of doing just operational audits. The Lead Plaintiff argues that that decision was instrumental in Internal Audit's detection of the fraud at WorldCom and its public disclosure. One of those factors about which Cooper gave extensive testimony was her concern in the Spring of 2002 that wireless debt was under-reserved. In the course of discussing each of these issues, Cooper testifies about Andersen's work and conversations with Andersen partners.
Cooper will be permitted to testify about certain of the issues that prompted her to begin financial audits. She testified that the factors were Andersen's indictment in the Enron scandal; the state of the Andersen workpapers reviewed in connection with the wireless reserve audit; a confrontation with an Andersen partner regarding the wireless reserve audit and Andersen's workpapers; Scott Sullivan's statement that Andersen partners felt like Internal Audit wrote "gotcha" reports; and Andersen partner Ken Avery's statement of unhappiness that Internal Audit took so many internal control recommendations to the WorldCom Audit Committee while Andersen brought none to the Audit Committee. Cooper Tr. at 312. A prior ruling has already excluded testimony regarding Enron. All additional Enron passages must be stricken, including 313: 20-23; 316:5-21.
Andersen contends that this testimony is not relevant since it is not necessary to tell "the complete story of how Internal Audit learned" of the fraud. The Lead Plaintiff is entitled to tell the "complete" story. Should Andersen wish a limiting instruction regarding any hearsay that remains in these passages, it may request one.
Andersen's objection to the testimony regarding Ogden is sustained; much of the testimony is hearsay. The following objections are sustained:
165-66 speculation 320:4-10 (first four words) leading 323:14-324:2 leading 329:13-330:2 no question; leading 331:19 (after word "right") no answer 333:17-24 leading 336:21-338:6 hearsay
343:8-13 (linked to testimony on 336-38) 345:10-346:11 hearsay 354:17-355:25 hearsay 362:6-363:15 hearsay 378:20-379:10 leading 405:11-19 hearsay 406:7-25 (linked to other stricken testimony) 431:13-16 leading 432:16-20 leading 440:17-24 leading 444:15-19 leading
SO ORDERED: