SEC Charges FTX Auditor for Helping Clients Violate Securities Laws

The U.S. Securities and Exchange Commission (SEC) announced charges against an accounting steadfast that worked for failed cryptocurrency speech FTX. The company, Prager Metis, has been accused of facilitating clients successful breaking national securities laws and besides auditor independency violations.

FTX Accountant Prager Metis Charged With Auditor Rules Violations

The U.S. securities regulator has charged accounting steadfast Prager Metis CPAs, LLC and its California nonrecreational services firm, Prager Metis CPAs, LLP with violating auditor independency rules portion besides aiding and abetting clients’ violations of America’s securities laws.

In its complaint, filed successful the U.S. District Court for the Southern District of Florida, the SEC claims that betwixt December 2017 and October 2020 Prager included indemnification provisions successful engagement letters for much than 200 audits, reviews, and exams. It alleges:

Prager was not autarkic from its clients for those engagements, arsenic required nether the national securities laws.

According to the Commission, Prager Metis continued to motion engagement letters with indemnification provisions and issued “accountant’s reports” successful which it purported to beryllium independent, contempt regulators repeatedly notifying its elder partners that this signifier rendered the steadfast not independent.

“Many of Prager’s clients included those ‘accountant’s reports’ successful their filings with the SEC. Prager allegedly besides failed to counsel its clients of its violations, adjacent aft the Public Company Accounting Oversight Board informed Prager that the indemnification provisions violated the independency requirements of the national securities laws,” the SEC elaborated.

According to a press release published Friday, the ailment seeks a imperishable injunction, disgorgement positive prejudgment interest, and a civilian monetary punishment against Prager. The SEC besides quoted the Director of its Miami Regional Office arsenic stating:

Auditor independency is captious to some protecting the integrity of fiscal reporting and promoting nationalist spot … Our ailment is an important reminder that auditor independency is important to capitalist protection.

While the announcement does not notation FTX oregon different customers of the accounting firm, the bankrupt crypto speech claimed earlier its November 2022 illness that its 2021 fiscal results had been audited by Prager Metis and different institution claiming crypto expertise, Armanino. Earlier this year, FTX’s caller absorption expressed concerns regarding the company’s audited fiscal statements.

What are your thoughts connected the SEC charges filed against FTX’s auditor? Let america cognize successful the comments conception below.