Securities Litigation

The SEC this week issued cease-and-desist orders against eight auditors, fining them $140,000 collectively, for violating auditor independence rules by preparing the very broker-dealer financials they were to audit. Broker-dealer auditors are bound by auditor-independence criteria established under Reg. S-X. By using BD-provided documents to prepare the client's financial statements, the sanctioned firms "essentially put themselves in the position of auditing their own work," said the SEC's release, here. The Release is another in a growing trend in which Enforcement ...