The Securities and Exchange Commission has agreed to settle charges with Maryland-based accounting firm Santos, Postal & Co. PC and one of its partners that their surprise examinations of an investment advisor were inadequate.

According to the SEC’s order, the surprise custody examinations conducted by the firm and partner Joseph A. Scolaro of client assets at investment advisor SFX Financial Advisory Management Enterprises “did not adequately consider fraud risk factors,” as the advisor’s president had secretly stolen money from some of its professional athlete clients.

The commission said that Santos Postal and Scolaro twice filed paperwork with the SEC that contained “untrue statements,” once to the effect that they had complied with certain procedures to verify client assets when they had not, and once to the effect that client assets were held with a qualified custodian when they were not.

“Surprise custody exams of investment advisers serve a critical role in protecting against the misuse of client assets and uncovering such misuse when it occurs,” said Anthony Kelly, the chief of the SEC Enforcement Division’s Asset Management Unit. “Santos, Postal & Co. failed to confirm with SFX’s clients the contributions made to and from their accounts and then made untrue statements about its custody exams.”

Santos Postal and Scolaro consented to the SEC’s order finding that they violated Section 207 of the Advisers Act and engaged in improper professional conduct pursuant to Section 4C of the Securities Exchange Act of 1934 and Rule 102(e) of the commission’s Rules of Practice. Without admitting or denying the findings, they agreed to be suspended from appearing and practicing before the SEC as an accountant, which includes not participating in the financial reporting or audits of public companies.

The SEC’s order permits the firm to apply for reinstatement after one year and Solaro after five years.

The firm also agreed to disgorgement of $25,800 in profits that it obtained for performing the exams plus interest of $3,276.76 and a penalty of $15,000. Scolaro agreed to pay a $15,000 penalty.

The SEC previously announced charges against SFX president Brian J. Ourand, who was later found by an administrative law judge to have misappropriated funds from client accounts, ordered to pay disgorgement of $671,367 plus prejudgment interest and a $300,000 penalty, and barred from the securities industry.

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