Internal investigations can arise in a number of different ways and can concern a number of different subjects. Allegations of financial misconduct, employment-related missteps, and breaches of fiduciary duty, among others, can all lead a company in that direction. Grand jury subpoenas, search warrants, target letters, media reports, whistleblower claims, audit reports, and routine risk… Continue Reading
Category Archives: Auditors
Subscribe to Auditors RSS FeedSEC Issues Risk Alert on Investment Adviser Custody Rule
Posted in Auditors, Compliance, Investment Advisers, Non-scienter-based ViolationsThe SEC can express its displeasure with a particular securities practice in a number of different ways, with increasing levels of fun for the alleged malefactor. Here’s a non-exhaustive list: One thing it can do is file an enforcement action in federal or administrative court. This option is not fun at all. It’s not as… Continue Reading
PCAOB Brings Case on Audit Documentation
Posted in AuditorsThe Public Company Accounting Oversight Board brought a settled action on November 13th against three outside auditors whose errors were measured not in substance, but in process. Dale Arnold Hotz, Jyothi Nuthulaganti Manohar, and Michael Jared Fadner – all CPAs and respectively a partner, director, and assurance manager at then-McGladrey & Pullen – issued a… Continue Reading
SEC Sues Auditor for Failing to Audit
Posted in Accounting Fraud, Auditors, Financial Fraud, Microcap Fraud, Non-scienter-based ViolationsThis world has a lot of problems that require fixing, but I dare say that scratch-off lottery tickets is not one of them. Still, that is the problem that Lee Cole and Linden Boyne ventured to solve through Electronic Game Card, Inc. (EGMI), a company that tried to develop credit card-sized electronic games that could… Continue Reading
SEC Charges Thornburg Mortgage Executives with Financial Fraud
Posted in Accounting Fraud, Auditors, Financial Fraud, SEC LitigationPerhaps the SEC, at least for the time being, is finding its groove with respect to financial fraud matters. For the second time in a two-month span, the Commission has brought a case for fraudulent disclosures regarding the health of a residential loan portfolio. In January, the SEC filed suit against Florida-based BankAtlantic and its… Continue Reading
SEC Charges First Auditor of 2012
Posted in AuditorsThe SEC brought its first enforcement action of 2012 against an auditor last Monday. It is not a terribly subtle case. All of the so-far unproven facts that follow come from the SEC’s complaint, filed in the Southern District of Florida. Briefly, Daniel Imperato is alleged to have orchestrated a scheme to use Imperiali, a business development… Continue Reading