The Securities and Exchange Commission has disciplined a New York-area CPA for violating an earlier order and assisting in audits, reviews and other accounting work for three publicly traded companies.

Back in May 2003, the SEC issued an order imposing sanctions against Michael R. Drogin, who was a partner from January 1998 through early 2009 with the Garden City, N.Y., accounting firm Liebman, Goldberg & Drogin LLP, now known as Liebman, Goldberg & Hymowitz. The 2003 order found that Drogin, who is licensed as a CPA in New York and New Jersey, engaged in improper professional conduct under Rule 102(e)(1) of the SEC’s Rules of Practice in connection with his audit of the 1999 financial statements of Teltran International Group Ltd.

The 2003 order denied Drogin the privilege of appearing or practicing before the SEC as an accountant, with the ability to request that the commission consider reinstatement after two years. The SEC has not reinstated Drogin’s privilege to appear or practice before the commission, and it said Tuesday that Drogin later violated the terms of the 2003 order.

From about the fall of 2005 to late 2008, while he was a partner of LGD, Drogin violated the 2003 order by performing audit, review and other accounting work in connection with filings made by three public companies, according to the SEC. In 2005 and 2006, Drogin participated in auditing the financial statements of one of the companies, which were included in registration statements and amendments filed with the commission, including a Form SB-2 filed in September 2005. In 2007, Drogin participated in auditing the financial statements of all three issuers, which were incorporated in various filings with the commission, including an annual report, a proxy statement, and registration statements filed by two of the issuers. Drogin also reviewed quarterly and current filings made with the commission by the three issuers.

In several instances, according to the SEC, Drogin advised the management of the various companies regarding their disclosures contained in the SEC filings. When one of the issuers restated its prior-period consolidated financial statements to properly reflect the classification of stock warrants receivable, Drogin participated in the audit of the restated financial statements, which were included in the issuer’s amended 2006 Form 10-K-SB filed with the Commission in November 2007.

In addition to performing audit and review work, Drogin assisted two of the issuers in responding to comments from the staff of the SEC’s Division of Corporation Finance on the three registration statements. In addition, Drogin periodically provided advice to the three issuers concerning accounting and disclosure issues, which was then reflected in the financial statements and disclosures included in various filings that these companies made with the commission.

In March and April 2008, Drogin issued audit reports for the financial statements of the three issuers, stating that each issuer’s financial statements were prepared in conformity with GAAP and fairly presented the financial position of the respective companies. These audit reports were incorporated into the issuers’ 2007 annual reports on Form 10-K filed with the commission, as well as an amended securities registration statement on Form S-1/A filed by one of the issuers in April 2008. In each instance, Drogin issued the audit report without having performed an audit of the financial statements, according to the SEC.

Drogin nevertheless represented in each audit report that an audit had been performed in accordance with applicable auditing standards and provided a reasonable basis for the unqualified report. Drogin’s audit reports also misrepresented that the amounts and disclosures in the financial statements had been examined on a test basis and the accounting principles used, according to the SEC.

Drogin has submitted an amended offer of settlement with the SEC in which he consents to the entry of an order amending the 2003 order to strike the subsections of the 2003 order regarding requests for reinstatement of his privilege to appear or practice before the commission. The SEC ordered that the subsections should be stricken in their entirety, and that another subsection denying Drogin the privilege of appearing or practicing before the commission as an accountant remain in effect.

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