Former Arthur Andersen partner Robert A. Putnam was charged by the U.S. with securities fraud for approving false financial reports that led to $9 billion in investor losses at pharmaceuticals distributor McKesson Corp.
Putnam, 48, was the audit partner for HBO & Co., which was acquired by San Francisco-based McKesson for $13.9 billion in January 1999. Putnam's attorney said the charges filed by the Securities and Exchange Commission were “overblown, abusive and without any basis.”
The SEC said Putnam knew HBOC's financial results were inflated by inappropriate accounting methods that, when disclosed after the merger, caused McKesson HBOC Inc., as it was known, to lose $9 billion in market value and its stock to fall 47%.
Putnam is the 10th person to be charged by the SEC in connection with HBOC. He faces suspension and loss of his auditing license. The matter will be decided by an SEC administrative judge.