The Securities and Exchange Commission reported Thursday on its enforcement results in fiscal year 2015, highlighting several cases involving accounting and auditing lapses.
In the fiscal year that ended in September, the SEC said it filed 807 enforcement actions covering a wide range of misconduct, and obtained orders totaling approximately $4.2 billion in disgorgement and penalties. Of the 807 enforcement actions filed in fiscal year 2015, a record 507 were independent actions for violations of the federal securities laws and 300 were either actions against issuers who were delinquent in making required filings with the SEC or administrative proceedings seeking bars against individuals based on criminal convictions, civil injunctions, or other orders.
In fiscal year 2014, the SEC filed 755 enforcement actions and obtained orders totaling $4.16 billion in disgorgement and penalties. Of the 755 enforcement actions filed in fiscal year 2014, 413 were independent actions for violations of the federal securities laws and 342 were either actions against issuers who were delinquent in making required filings with the SEC or administrative proceedings seeking bars against individuals based on criminal convictions, civil convictions, civil injunctions, or other orders.
In the first non-independence case against a major audit firm since 2009, the SEC noted that it charged BDO USA, LLP last month with issuing false and misleading unqualified audit opinions about the financial statements of General Employment Enterprises, and five of the firm’s partners, including national office personnel, for their roles in the deficient audits.
The SEC also sanctioned Deloitte & Touche LLP in July and eight other auditing firms in December for various brokerage firms for violating independence rules.
In the SEC’s case last month against MusclePharm Corp., the SEC charged the sports nutrition company’s former audit committee chair who substituted his own incorrect interpretation of SEC rules for those of an outside expert, resulting in an incorrect disclosure. The SEC noted that it has also charged 14 accountants and 10 attorneys for their roles in aiding perpetrators of microcap fraud.
“Vigorous and comprehensive enforcement protects investors and reassures them that our financial markets operate with integrity and transparency, and the Commission continues that enforcement approach by bringing innovative cases holding executives and companies accountable for their wrongdoing sending clear warnings to would-be violators,” said SEC chair Mary Jo White in a statement. “The Enforcement Division’s leveraging of data, quantitative analytics and the expertise of our other divisions contributed significantly to this year’s very strong results.”
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