Instead Andersen faced a jury and became a convicted felon for destroying Enron-related documents as regulators began asking questions in the weeks before the energy company imploded in 2001. The one-time $4 billion accounting firm can no longer audit clients, who are a distant memory anyway.

Rusty Hardin, who last year led Andersen's failed effort to win acquittal of a federal obstruction of justice charge, said Friday the firm would have agreed to a deal like the one reached with Merrill "in a New York second."

"This is an acknowledgment of the way it should be done and an acknowledgment that the way they did it with Arthur Andersen is wrong," Hardin said. "This is a recognition that even if several employees did something they shouldn't do, the entire entity shouldn't be indicted."

Andrew Weissmann, one of the attorneys who prosecuted Andersen in a six-week trial in Houston, called the two situations "apples and oranges." He praised Merrill's willingness to publicly accept responsibility for possible wrongdoing of former employees, who allegedly helped Enron inflate its earnings, and agreeing to implement sweeping reforms to prevent such problems in the future.

"It's fair to say we're the same people and we're just as reasonable now as we were then. If we had had the same level of confidence and the same commitment by that institution, a different result could have been had there," Weissmann said.

The Justice Department announced the deal Wednesday before three former Merrill Lynch executives appeared before a U.S. magistrate in Houston on charges of conspiring to arrange for the brokerage firm to pretend to have bought Nigerian barges in December 1999 so the energy company could post a bogus profit. Former Enron finance chief Andrew Fastow assured the executives in a verbal side deal that Merrill's $7 million interest would be bought out at a premium within six months, so a loan was wrongly treated as a sale, the indictment in the case said.

Merrill Lynch's deal also includes continued cooperation with the investigation. An independent auditor and a monitor appointed by the Enron Task Force will oversee Merrill for 18 months to ensure compliance, and violations of the agreement could result in an indictment, Weissmann said.

Anthony Sabino, a bankruptcy and energy law expert from St. John's University, said other banks and brokerages that did business with Enron should take note if any of those dealings pique prosecutorial interest.

"Merrill saw that resistance was futile," Sabino said. "Andersen resisted, Andersen is out of business."

Merrill Lynch spokesman Mark Herr said the firm fully cooperated with the Justice Department and other regulators "as we always do."

"As a firm, we take very seriously the notion that we cooperate with the government when the government is investigating," he said.

It wasn't the first time Merrill settled to avoid prosecution. In March the firm, without admitting or denying wrongdoing, paid $80 million to settle civil Securities and Exchange Commission allegations of aiding and abetting Enron's securities fraud.

And last year the firm paid $100 million to settle allegations from New York Attorney General Eliot Spitzer that analysts had encouraged investors to buy stocks they privately sneered at, often because their published research was aimed at helping win business.

The deal served as a model for a $1.4 billion industrywide settlement finalized in April with 10 financial institutions, including Merrill, requiring them to ensure stock recommendations weren't tainted by efforts to obtain investment banking fees or other business.

"The goal was to bring much-needed reforms to Wall Street overall," said Juanita Scarlett, spokeswoman for Spitzer. "We did not want to put any New York corporation out of business."

Hardin said Michael Chertoff, head of Justice's criminal division, gave the firm an ultimatum 10 days before Andersen's indictment was unsealed: Plead guilty to a felony or be charged. He said there had been talks about deferring prosecution, but they hadn't reached advance stages before the indictment was handed up by a grand jury.

"We didn't believe these guys had committed a crime, but we accepted responsibility for their conduct," Hardin said. "In an agreement, we wanted to leave open the possibility that they were not guilty."

Former Andersen auditor David Duncan pleaded guilty last year to obstruction, testified in the trial and is awaiting sentencing. No other individuals from Andersen have been charged with any crimes.

John C. Coffee, a securities law expert from Columbia Law School, dismissed Hardin's comments as convenient hindsight.

"The firm admitted responsibility for shredding documents, but hasn't wavered on its belief that none of its employees did anything wrong," Coffee said.

-- Kristen Hays, AP Business Writer