U.S. says audit watchdog staff helped KPMG pass audit inspections

January 22, 2018

By Pete Schroeder

WASHINGTON (Reuters) – The U.S. government on Monday announced criminal and civil charges against three former staffers of an audit watchdog, accusing them of providing confidential information to help accounting firm KPMG pass regulatory inspections.

Three ex-KPMG executives also were charged with encouraging disclosure of the data on Public Company Accounting Oversight Board (PCAOB) audit inspections, the U.S. Securities and Exchange Commission and Justice Department said in separate filings.

The incidents occurred between 2015 and 2017, the government said.

Two of the former PCAOB staffers charged, Cynthia Holder and Brian Sweet, left the watchdog to work for KPMG during that period, authorities said, taking confidential information with them. The third, Jeffrey Wada, also tried to move to KPMG, they said.

Holder’s lawyer could not immediately be reached. A lawyer for Wada could not immediately be identified, and calls to phone numbers linked to his name were not immediately returned.

Sweet has already pleaded guilty to criminal conspiracy charges, according to a spokesman for the prosecutors. He has also reached a settlement with the SEC, the agency said. Sweet’s lawyer, Richard Morvillo, declined to comment.

The ex-KPMG executives charged were David Middendorf, David Britt and Thomas Whittle. Gregory Bruch, Middendorf’s lawyer, said his client was a “very well regarded accounting professional” who “intends to defend himself.”

Melinda Haag, Britt’s lawyer, said her client was innocent, and that the conduct he was accused of was not criminal.

A lawyer for Whittle could not immediately be reached.

The government charged that the PCAOB and KPMG employees conspired to share information about which audits the watchdog would be reviewing, giving KPMG an opportunity to shore up those before facing scrutiny.

The PCAOB is a private non-profit corporation that monitors the audits of public companies.

In a statement on Monday, SEC Chairman Jay Clayton said he did not believe the improper actions compromised the integrity of the KPMG audits embroiled in the scandal.

Last year, KPMG said it had fired six people over the PCAOB leaks, which the company had identified and brought to the government’s attention. The company hired outside legal counsel to investigate the matter and took “remedial actions” to prevent a recurrence, KPMG spokesman Manuel Goncalves said on Monday in an email.

Steven Peikin, co-director of the SEC’s enforcement division, said the enforcement action was unrelated to a December shake-up of the PCAOB in which the SEC named a new head for the watchdog and four new board members.

(Reporting by Pete Schroeder; Additional reporting by Brendan Pierson; Editing by Paul Simao and Cynthia Osterman)

Powered by WPeMatico

Bookmark the permalink.

Comments are closed

  • RIFLE THROUGH THE FILES

    Generic selectors
    Exact matches only
    Search in title
    Search in content
    Search in posts
    Search in pages
    Filter by Categories
    ADWEEK FILE
    AMERICAN THINKER FILE
    BREITBART FILE
    CAR AND DRIVER FILE
    CNET FILE
    DRUDGE REPORT FILE
    ENTREPRENEUR FILE
    FANDANGO MOVIE FILE
    FARMER’S ALMANAC FILE
    FORBES FILE
    FOX NEWS FILE
    FREE BEACON
    FRONT PAGE MAG FILE
    INFOWARS FILE
    INVESTOPEDIA FILE
    LILES FILES
    NEWSBUSTERS FILE
    NY POST FILE
    ONE AMERICA FILE
    PJ MEDIA FILE
    REAL CLEAR WORLD FILE
    REASON FILE
    REUTERS FILE
    ROBB REPORT FILE
    SUCCESS FILE
    TOWN HALL FILE
    USA TODAY FILE
    WIRED FILE
    WND FILE
    ZERO HEDGE FILE