Closed independence matters.

The Professional Ethics Executive Committee (PEEC) and certain state societies' Ethics Committees have entered into an agreement with PricewaterhouseCoopers LLP (PwC) and certain AICPA and/or state CPA society members associated or formerly associated with the Firm ("individual Participants") as discussed below.

Pursuant to an SEC Order of Jan. 14, 1999, the SEC appointed Mr. Jess Fardella of Lankler Siffert & Wohl, LLP to conduct an internal investigation of PwC's compliance with the SEC's Independence Rules. Pursuant to the Order, Mr. Fardella submitted a report on Jan. 6, 2000, discussing the results of the Internal Investigation (the "Fardella Report"). Based upon the results of the Fardella Report, the PEEC initiated investigations of a number of PwC professionals who were AICPA and/or state CPA society members.

Shortly after the issuance of the Fardella Report, the largest U.S. firms, including PwC, entered into an agreement with the SEC which required the firms to undergo a similar investigation of their compliance with the SEC's Independence Rules. This program was called the "Look-Back Program" (the Program) and afforded the firms, their partners and employees a safe harbor protection from SEC enforcement action for all but the most serious independence violations. The Program required that the firms retain independent counsel to oversee reviews and to disclose information concerning past independence violations relating to ownership of prohibited financial interests in their SEC audit clients during a period of at least nine months ending Mar. 31, 2000. The Program called for the...