SEC Charges Accountant and Firm with Aiding Massive Securities Fraud

The U.S. Securities and Exchange Commission (SEC) has taken decisive action against an accountant and his firm for their alleged role in a significant securities fraud case. Olayinka Oyebola and his PCAOB-registered accounting firm, Olayinka Oyebola & Co. (Chartered Accountants), face charges of aiding and abetting a massive fraud scheme orchestrated by businessman Mmobuosi Odogwu Banye, also known as Dozy Mmobuosi, and three U.S. companies under his control.

This development comes on the heels of a recent $250 million final judgment obtained by the SEC against Mmobuosi and his related entities, collectively referred to as the Tingo entities.

According to the SEC's complaint filed in the U.S. District Court for the Southern District of New York, Oyebola and his firm are accused of deliberately failing to take action upon discovering that Mmobuosi and the Tingo entities had created multiple fake audit reports bearing Oyebola's signature. These fraudulent reports were allegedly included in SEC filings as if they were legitimate documents issued by Oyebola's firm.

The complaint further alleges that Oyebola made material misstatements to the then-auditor of one of the Tingo entities. Both Oyebola and his firm are accused of helping Mmobuosi conceal the fact that the audit reports were fake, leading auditors, investors, and regulators to rely on these misrepresentations and fraudulent documents.

Implications of the Alleged Fraud

The SEC contends that the assistance provided by Oyebola and his firm enabled Mmobuosi and the Tingo entities to carry out a multi-year scheme. This scheme allegedly involved inflating financial performance metrics and defrauding investors worldwide.

Antonia M. Apps, Director of the SEC's New York Regional Office, emphasized the severity of the allegations, stating, "Oyebola and his firm violated the public trust and abdicated their responsibilities as public company accountants and auditors by helping Mmobuosi and the Tingo entities effectuate and conceal their fraud."

The SEC's complaint charges Oyebola and his firm with aiding and abetting violations of the antifraud provisions of federal securities laws. Additionally, Oyebola faces charges of aiding and abetting Mmobuosi's violation of lying to auditors.

The SEC is seeking several punitive measures, including:

1. Civil penalties
2. Permanent injunctive relief
3. A permanent bar preventing Oyebola and his firm from acting as auditors or accountants for U.S. public companies
4. Prohibition from providing substantial assistance in preparing financial statements filed with the SEC

As this case progresses through the legal system, it will likely have far-reaching implications for the accounting profession and the broader financial industry.

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