Horrors in wake of Enron-Andersen

CORPORATE America has been taking a walk on the wild side. The collapse of energy giant Enron and the disgrace of its auditor, Andersen, shocked the world. But Enron boss 'Kenny Boy' Lay and his malleable number crunchers are not the only ones who have been indulging in questionable practices.

Former titan Dennis Kozlowski this week resigned as chairman and chief executive of industrial conglomerate Tyco. He was promptly charged with tax evasion on paintings including works by Monet and Renoir. Kozlowski, the spiritual heir of Wall Street's original robber barons, built Tyco into one of the world's biggest industrial companies through a string of takeovers. The fallen business superstar was this week reduced to handing over his passport to prevent him skipping his $3m bail.

In the past couple of days, the market has been scared by a number of other companies, including Houston-based energy group El Paso, share trader Knight and drugs group Bristol-Myers Squibb.

El Paso has been threatened with draconian action by the Federal Energy Regulatory Commission, which suspects it provided false information in response to inquiries over its strategy in California. Its treasurer, Charles Rice, died of self-inflicted gunshot wounds a few days ago.

Bristol-Myers faces lawsuits from 29 states, alleging it improperly tried to delay competition to one of its widely-used cancer drugs. Knight is busy denying irregular share trading during the dotcom boom after accusations from one of its former senior traders.

The latest horrors come only days after leading Wall Street investment bank Merrill Lynch agreed to pay a £70m fine to settle allegations that it had misled investors with tainted share research.

Old hands will rightly say that this sort of chicanery always comes to light in a bear market. Nonetheless, the extent to which public confidence in the financial system has been shaken is alarming. The Dow Jones index of leading US shares has struggled to return to its value before 11 September. Over the past month, it has dipped back sharply as investors, spooked by each fresh set of revelations, are left scratching their heads over how much shares are really worth.

No accounting scandals on the American scale have as yet come to light in the UK, but there have been smaller incidents, including troubled health club Esporta, which has been inflating its revenues by booking the earnings of self-employed sports instructors as its own.

Controversy is also raging over the accounts of the once-mighty Vodafone. There is no suggestion that the company has done anything wrong, but shareholders were mightily confused last week as to whether it has made a £13.5bn pre-tax loss, or, as boss Sir Chris Gent would prefer to think of it, a £7bn operating profit. Investors in the UK cannot afford to be too complacent.

Ashcroft counts cost of Tyco link