Posted 10/1/2023, 2:48:45 AM
SEC Takes Legal Action Against FTX Auditor Over Independence Violations
- SEC initiates legal action against FTX's auditor Prager Metis for auditor independence violations
- Alleges Prager Metis illegally provided both auditing and accounting services to clients like FTX
- Auditor independence rules prohibit providing both services to prevent conflicts of interest
- SEC says violations occurred over nearly 3 years and involved "hundreds" of independence breaches
- FTX engaged Prager Metis to audit FTX US and FTX in 2021 before declaring bankruptcy in 2022
- SEC concerned Prager Metis audit reports were used by FTX to bolster public trust before collapse
- FTX CEO raised concerns about accuracy of Prager Metis audited financial statements