The SEC's fiscal year wrapped on September 30, so naturally, they wanted to take a victory lap with their enforcements results.
Among the accounting and auditing highlights brought up are:
- Computer Science Corporation's manipulation of "accounting models that artificially increased its profits but had no basis in reality."
- Deutsche Bank's overvalued derivatives that exposed them to significant "gap risk" thanks to a lack of "robust internal controls over financial reporting."
- Sports supplement company MusclePharm who didn't disclose perks for its executives including "automobiles, apparel, meals, golf club memberships," as well as personal tax and legal services.
- BDO's bungling audit of General Employment Enterprises that featured a vexing certificate of deposit and emails on Christmas Eve.
- Auditor independence violations by Deloitte and eight other audit firms.
There's loads of other non-accounting enforcement actions against firms like KKR, BlackRock, Morgan Stanley, Goldman Sachs, Standard & Poor's, Goodyear, Avon, BNY Mellon. It goes on ad nauseum. All told, the SEC had 507 independent enforcement actions and $4.19 billion in disgorgement and penalties.
Not bad! But it's hard to get too excited when insider trading violations and their punishment are ludicrously inconsistent, clawback regulations are rarely enforced and the Chair has a ridiculous number of conflicts. There's even a petition out there calling on Mary Jo White to recuse herself from picking the next PCAOB chair. And Elizabeth Warren isn't happy, which is never good for you.
Hopefully, they put those on the ol' to-do list for 2016. But, for my sake, they do need to keep up the pace on accounting and auditing enforcement. I like to stay busy.
[SEC]
