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To: Donald Stone
Excerpt from article posted a couple of days ago.

The inquiry is in preliminary stages and the SEC has alleged no wrongdoing; an SEC spokesman declined to comment.

A spokesman for PricewaterhouseCoopers, the Pinnacle auditors, said: "Our independence with respect to Pinnacle has never been impaired. All of the services provided to Pinnacle were appropriate and allowable under existing SEC standards."

Pinnacle's Mr. Day added: "We're no criminals here. There are no accounting issues. We've done our accounting appropriately."

In Pinnacle's case, the SEC is looking at whether Pinnacle can justify how it valued the Motorola assets, as well as how it tallied acquisition-related expenses, according to a person with knowledge of the probe. According to an SEC filing, Pinnacle recorded the unit's current assets at $271.7 million.

The SEC also is examining Pinnacle's $28 million in acquisition expenses: such things as legal, consulting and accounting fees, the person familiar with the probe said.

If some of the figures of that type are on the high side, they could work to increase earnings going forward, accounting experts said.

In addition to auditing, PricewaterhouseCoopers has advised Pinnacle on possible deals, including "due diligence" work on possible targets -- about $3.7 million alone in consulting fees for work on the Motorola deal -- and it has consulted for the board on executive compensation, according to company executives.

"We pay a lot of fees to our auditor's consulting side," Mr. Day said in the conference call, but declined to provide details.

The SEC, he said, "looked at that relationship and said, 'If you're paying a lot of fees, maybe [the auditors] let you have your way on accounting and maybe you can do whatever you want do.' That's their position and their fear."

Pinnacle has other close ties to its auditor.

Mr. Day was a PricewaterhouseCoopers partner in the mergers-and-acquisitions group from 1986 until he joined Pinnacle as chief financial officer in 1997.

When Mr. Day became Pinnacle's chief operating officer in July, he was replaced by Jeffrey Card, who had worked as a PricewaterhouseCoopers acquisitions partner since 1991.

8 posted on 01/19/2002 5:50:51 AM PST by Donald Stone
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To: Donald Stone
Fast forward to April 2001 to read about the on-going saga of Pinnacle Towers & Price Waterhouse for a blueprint for what will take place in the Enron cash in the coming years.

Pinnacle & Price Waterhouse

9 posted on 01/19/2002 5:59:48 AM PST by Donald Stone
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