SEC Fines Prager Metis $1.95 Million for Negligence in FTX Audits
- SEC fins Prgr Mtis $1.95 million for nglignc nd flwd udits of dfunct cryptocurrncy xchng FTX.
- Th firms udit rports fild to mt Gnrlly Accptd Auditing Stndrds (GAAS), risking invstor losss.
- Prgr Mtis fcd dditionl chrgs for violting uditor indpndnc ruls btwn 2017 nd 2020.
In dcisiv ction to protct invstors, th Scuritis nd Exchng Commission (SEC) hs imposd hfty $1.95 million fin on udit firm Prgr Mtis. Th sttlmnt stms from llgtions of misconduct during udits of th now-dfunct cryptocurrncy xchng, FTX. Prgr Mtis, without dmitting or dnying wrongdoing, grd to py $1.75 million in civil pnltis, disgorgd profit, nd ccrud intrst.
Th SEC llgs tht Prgr Mtis producd two flwd udit rports for FTX btwn Fbrury 2021 nd April 2022. According to th SEC, ths rports fild to dhr to Gnrlly Accptd Auditing Stndrds (GAAS). Th SEC rgus tht Prgr Mtis did not dqutly vlut its own cpbilitis nd rsourcs during th FTX udit. This lps in qulity control rportdly ld to filurs in dhring to GAAS cross multipl rs of th udit.
Additionlly, Prgr Mtis rportdly ovrlookd th significnt risk posd by th clos tis btwn FTX nd Almd Rsrch LLC, hdg fund undr th control of FTXs formr CEO, Sm Bnkmn-Frid. Frid ws rcntly convictd of frud nd sntncd to 25 yrs in prison.
SEC Alleges Negligence-Based Fraud
Spcificlly, th SEC chrgs th firm with nglignc-bsd frud, indicting tht thir ctions potntilly dfrudd FTX invstors. According to Gurbir S. Grwl, th SECs Dirctor of Enforcmnt, this nglignc lft invstors without th ky informtion rquird to mk sound dcisions. As rsult, FTXs collps ld to billions in losss.
To fulfill thir rol ffctivly, uditors must, mong othr things, b indpndnt, xrcis du profssionl cr nd skpticism, nd comply with ll pplicbl profssionl stndrds. As w llg in ths nforcmnt ctions, Prgr Mtis fll short in ll of ths rs, sttd Gurbir S. Grwl.
Th sttlmnt gos byond th FTX cs. Th gncy lso nnouncd sprt chrgs ginst th firm for violting uditor indpndnc ruls in udits conductd btwn 2017 nd 2020. Ths chrgs, sttld through sprt finl judgmnts, highlight th importnc of uditor indpndnc in mintining th intgrity of finncil mrkts.
Whil Prgr Mtis lwyr, Bruc Brun, xprssd stisfction with th sttlmnt, h mintind th firms innocnc. Lik othrs, Brun sttd, Prgr Mtis ws victim of th collusiv frud by mngmnt t FTX.
Related Readings | SEC Faces Backlash Over Flyfish Club NFT Settlement, Critics Call It Overreach
Read more: https://www.tronweekly.com/sec-fines-prager-metis-1-95-million-ftx-audits/
Text source: TronWeekly
