February 9, 2015

SEC v. China: Tug-of-War Over Audit Files Finally Ends!

On Friday – after a battle lasting 3 years! – the SEC announced that the China-based affiliates of the Big 4 (Deloitte Touche Tohmatsu, Ernst & Young, KPMG and PwC) settled SEC administrative charges by each paying $500k and admitting that prior to the commencement of the agency’s enforcement proceedings, they didn’t provide the SEC with the work papers for audits conducted for US companies. As noted in this Reuters article, the settlement also lays out the process that the firms must follow for future record requests and also details the consequences that may face if they fail to follow it.

It’s amazing how long this battle dragged out – an administrative law judge from the SEC suspended the Big 4’Chinese affiliates over a year ago. And bear in mind that WSJ reported last June that settlement talks had commenced. Not easy to settle with four large organizations based overseas…

Meanwhile, as noted in this blog, the SEC’s concept release on audit committees is expected as early as next month…

SEC Grants Second Bad Actor Waiver With Conditions: Redux

Recently, I blogged about the SEC granting its second bad actor waiver with conditions – to Oppenheimer & Co. Since then, there has been some backlash starting off with this dissent from SEC Commissioners Aguilar and Stein (which was issued about a week after the SEC’s order) and more, as noted in this blog – and this WSJ article and DealBook column

SEC Approves PCAOB Budget

Last week, the SEC approved the 2015 budget of the PCAOB and the related annual accounting support fee.

Notes from San Diego

Mike Gettelman has been dribbling out notes from the recent Northwestern securities conference in San Diego in his blog, with his unique take on many topics including fee-shifting and forum selection bylaws, economic shareholder activism, financial advisor liability, Section 162(m) disclosure, the disclosure reform project, crowdfunding alternatives available now, class action claims administration, admissions in SEC Enforcement actions, accounting stuff, and numerous gems from the lips of Delaware CJ Strine. Don’t forget to sign up on Mike’s blog to get future entries pushed to you…

– Broc Romanek