By Kristen Hays
The Associated Press

HOUSTON - Arthur Andersen LLP was sentenced Wednesday to five years of probation and fined $500,000 for obstruction of justice for its handling of Enron Corp.-related documents to thwart a federal probe of the fallen energy company's finances.

The punishment was the maximum allowed under law. Lawyers for the firm, a shadow of the $4 billion entity it was a year ago, have said they will appeal.

Prosecutors and the Securities and Exchange Commission had asked for the harshest possible penalty to make an example of the firm.

"Andersen's conduct in obstructing the Securities and Exchange Commission investigation of Enron, we submit, contributed to - contributed to significantly - the historic shaking of the foundations of our markets," Prosecutor Sam Buell told the judge.

Former federal Prosecutor Robert Mintz, now a partner with McCarter & English in Newark, N.J., said probation means that Andersen is on notice that it faces more fines and extended probation if the firm violates terms handed down by U.S. District Judge Melinda Harmon.

Probation seems a hollow threat for a firm that shut its audit practice and closed offices across the country after its conviction in June following a six-week trial. Andersen, once a revered member of the Big Five accounting firms, has fewer than 1,000 of 28,000 workers left on the payroll after most bolted to other firms.

Andersen's criminal trial was the first to emerge from last year's dizzying collapse of Enron, the once-giant energy trader.

Andersen was accused of shredding Enron-related documents last year to thwart an SEC probe.

According to jurors, the knockout blow came May 14 when David Duncan, the former auditor in charge of the Enron account, testified that in-house attorney Nancy Temple told him to remove a sentence and her name from a memo regarding Andersen's take on Enron's Oct. 16 earnings release.

Andersen fired Mr. Duncan in January shortly after he publicly acknowledged that Enron documents had been shredded. He later pleaded guilty to obstruction of justice and agreed to cooperate with the government. His sentencing is set for Jan. 3.

No one else at Andersen has been charged.

The firm and many of its former partners face lawsuits from shareholders left with near-worthless stock after the failures of Enron and WorldCom Inc.

Outside court, Andersen attorney Rusty Hardin said the company still believes its employees committed no crimes.

"Our company should not have been destroyed because of the conduct of some individuals the government disagrees with," Mr. Hardin said. "Regardless of that, it has happened now and (Andersen) has to live with that."