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The crackdown on the nation's bean-counters continued Tuesday with securities regulators fining


$2.4 million for willfully aiding and abetting lies told by



-- once one of the nation's largest apparel manufacturers.


Securities and Exchange Commission

alleged that the nation's largest accounting firm went along with Warnaco's deliberate "mischaracterization" of a $145 million earnings restatement in 1998. Regulators say the accountants knew Warnaco misled investors in 1999 by describing an overstatement of the company's inventory accounts as a writedown for "start-up related" costs.

The civil penalty, which PricewaterhouseCoopers did not contest, is the latest in a string of fines and sanctions imposed by the SEC on accounting firms in the aftermath of


. Just last month, an SEC administrative judge ordered

Ernst & Young

to pay a $1.7 million penalty and barred the firm from taking new public audit clients for six months because it violated a conflict-of-interest regulation.

Over a two-year period ending with the bankruptcy filing in June 2001, Warnaco's stock went from $27 to 39 cents.

This is the third time since 2002 that regulators have sanctioned PricewaterhouseCoopers. The audit firm previously had been ordered to pay a total of $6 million in fines for other infractions.

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The discovery of the misleading statements in Warnaco's filings, along with other management missteps, ultimately led to the collapse of the women's apparel manufacturer and the November 2001 ouster of its high-profile chief executive Linda Wachner. Last year, a slimmed-down Warnaco emerged from bankruptcy under new management.

In addition to the action against PricewatehouseCoopers, the SEC ordered Wachner to cough up $1.32 million in bonuses she received based on the company's faulty 1998 earnings reports. The SEC penalty is the latest indignity for Wachner, whose aggressive management style helped build Warnaco into a Fortune 500 company before its downfall.

Regulators also disciplined William Finkelstein, the company's former chief financial officer, and Stanley Silverstein, Warnaco's former general counsel.

"An issuer's filings cannot give misleading reasons for its financial results and must disclose material information to investors," said SEC Associate Director Antonia Chion in announcing the enforcement actions.

The administrative orders filed in the case show that Warnaco's former senior management, including Wachner, was successful in persuading Pricewaterhouse to go along with the restatement mischaracterization, even though the auditors had discovered problems in the company's inventory accounting.

The regulators charge PricewaterhouseCoopers went along with Warnaco's deception, even though one of the firm's audit partners had told the apparel executives that the press release they intended to file announcing the reason for the restatement was "inconsistent."

Ever since

Arthur Andersen

was found to have been an intimate player in the accounting fraud at Enron, the SEC and federal prosecutors have been taking a much tougher stance with auditors on issues of integrity and independence.

Last year, the SEC charged


with fraud in connection with its past audits of


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. Regulators also charged four of the firm's partners in that case, which KPMG is challenging.

This past September, former Ernst partner Thomas Trauger was charged by federal authorities with obstruction of justice for allegedly destroying audit working papers stemming from the firm's work for


, a credit card company.

In the most serious blow to the accounting profession, federal prosecutors won an obstruction-of-justice conviction against Arthur Andersen in the Enron scandal, a legal victory that effectively shut down what had been one of the world's largest audit firms.