Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Ernst & Young, auditors to pay over $10 million to settle SEC charges

Published 08/02/2021, 02:35 PM
Updated 08/02/2021, 04:11 PM
© Reuters. The logo of Ernst & Young is seen at a branch in Zurich, Switzerland October 24, 2018. REUTERS/Arnd Wiegmann/Files

© Reuters. The logo of Ernst & Young is seen at a branch in Zurich, Switzerland October 24, 2018. REUTERS/Arnd Wiegmann/Files

(Reuters) - Accounting firm Ernst & Young LLP, a partner and two former employees agreed to pay more than $10 million to settle U.S. Securities and Exchange Commission charges they violated auditor independence rules, the agency said on Monday.

Ernst & Young, partner James Herring and former partners James Young and Curt Fochtmann interfered with a public company's selection of an auditor threatening their ability to remain objective and impartial as auditors, the SEC said.

The agency brought related charges against William Stiehl, previously chief accounting officer at the company which the SEC did not name, for his misconduct in the selection process, known as a request for proposal process.

None of the defendants admitted or denied the SEC's findings, which concerned alleged wrongdoing in 2014 and 2015.

"EY is committed to competing fairly for new business and on the basis of our qualifications and merits," and has improved training and monitoring to ensure compliance with its request for proposal policies, the company said in a statement.

Lawyers for the other defendants did not immediately respond to requests for comment.

Sealed Air (NYSE:SEE) Corp, where Stiehl had been chief financial officer, said in 2019 it terminated his employment. A company spokesperson did not immediately respond to a call for comment.

© Reuters. The logo of Ernst & Young is seen at a branch in Zurich, Switzerland October 24, 2018. REUTERS/Arnd Wiegmann/Files

"Auditor independence is not merely an obstacle to overcome, it is the bedrock foundation that supports the integrity, transparency, and reliability of financial reporting," SEC official Charles Cain said in a statement.

Ernst & Young agreed to pay $10 million to settle the civil charges. Herring, Young, and Fochtmann agreed to pay $50,000, $25,000, and $15,000, respectively, and to temporary suspensions. Stiehl agreed to a fine of $51,000.

Latest comments

auditing firms are like the bond rating firms all the way till 2008. how are they going to disclose all the wrong/bad stuff on their clients who can fire them any minute. conflict of interest is massive there. only way to regulate the industry to hold the ppl accountable instead of having settlement. that way no one dire to sign off on incomplete/inaccurate analysis.
What were theh threatening to disclose?
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.