Enron's former chief financial officer will pay $300,000 to settle allegations that he helped the company commit fraud, federal regulators said Wednesday.
Jeffrey McMahon, who neither admitted nor denied the Securities and Exchange Commission allegations, also will be barred from serving as an officer or director of a public company for five years, and will be suspended as an accountant for at least three years.
Under the agreement, which is subject to the approval of the U.S. District Court, McMahon will pay disgorgement of $150,000 and a civil penalty of $150,000.
Tom Kirkendall, McMahon's attorney, said his client "has long since moved on ... (and) appreciates the opportunity to put this matter behind him."
McMahon has been the president of Houston-based Zilkha Biomass Energy since 2004.
The SEC alleged that McMahon participated in the "sale" of an interest in Nigerian power generating barges to Merrill Lynch that allowed Enron to improperly report $12 million in earnings in the fourth quarter of 1999.
"Enron never should have recorded profits from this purported sale because the risks and rewards of ownership in the barges never passed to Merrill Lynch due to an oral side agreement made by McMahon and others," according to the SEC.
McMahon also made false and misleading statements to the national credit rating agencies regarding Enron's financial position and cash flow, the SEC alleged.
McMahon replaced ousted CFO Andrew Fastow in October 2001 and also served as president after Enron, then the nation's seventh largest company, entered bankruptcy proceedings in December 2001.
He resigned in June 2002.
On Monday, Kenneth Rice, the former chief of Enron's high-speed Internet unit who helped convict former CEO Jeffrey Skilling and company founder Kenneth Lay, pleaded guilty to securities fraud and was sentenced to 27 months in prison. Lay died in July, erasing fraud and conspiracy convictions.
Rice, who became the ninth ex-Enron executive to receive a jail term after pleading guilty to crimes, agreed to help federal prosecutors on other related cases and his sentencing was postponed as he cooperated.
Enron's collapse after years of accounting tricks resulted in thousands of lost jobs, more than $60 billion in market value and more than $2 billion in pension plans.
