SEC Charges Prager Metis CPAs with Violations of Auditor Independence Rules

The U.S. Securities and Exchange Commission announced charges against accounting firm Prager Metis CPAs, LLC and its sister company, Prager Metis CPAs LLP, for their violations of auditor independence laws and assisting their clients’ violation of federal securities laws. According to the SEC's complaint, over a period of three years, these companies issued engagement letters containing indemnification provisions which failed to uphold the required level of auditor independence. In addition, those involved with preparing and signing the reports were aware that the provision rendered them un-independent, yet continued to do so. As a result, the SEC has filed a complaint against Prager Metis CPAs, seeking a permanent injunction, disgorgement plus interest, and a civil monetary penalty. The investigation is ongoing and being led by Drew D. Panahi, Michelle Bosworth, and Carol Der Garry and supervised by Thierry Olivier Desmet, Fernando Torres, and Glenn S. Gordon in the Miami Regional Office, and the litigation is being led by Christine Nestor and supervised by Teresa Verges.