Dynegy, Inc. is a large energy company based in Houston, Texas. In the spring of 2003, Dynegy restated four years of earnings, increasing the loss from 1999 through the third quarter of 2002 by \($431\) million to a total of \($1.42\) billion. On September 24, 2002, the SEC filed a settled enforcement action against Dynegy in connection with incorrect account- ing practices in relation to a \($300-million\) financing activity known as "Project Alpha." 

Required:

Use the internet to obtain information about how Dynegy accounted for Project Alpha and what the results of the SEC's actions have been for Dynegy and its officers. Sources of information on this issue can be found at Web sites for Dynegy, Inc., the SEC, and various news providers (such as The Wall Street Journal). Write a brief memo describing what auditors could have done to discover this error. Also describe the judg- ments brought by the SEC and courts against the company and its officers.