In a rare and aggressive move, the Securities and Exchanges Commission (SEC or Commission) recently sought a court order enforcing an almost decade-old SEC suspension of an accountant and forcing the accountant to disgorge over half a million dollars of compensation earned for providing prohibited services (plus pre-judgment interest). The SEC has infrequently filed actions to enforce practice bars imposed on accountants (and lawyers). Given the SEC’s newly announced enforcement initiative targeting “gatekeepers,” this case is an important reminder to barred accountants and attorneys (and companies that hire such persons) that the SEC could seek to hold them liable for conduct that violates a bar, no matter how stale the bar is.
In 2004, the SEC sued Del Global Technologies Corp. and several of its former officers and directors, including its former Chief Financial Officer, Michael Taber. The SEC alleged that the defendants perpetrated a financial fraud at Del Technologies from 1997 to 2000 that resulted in the company overstating its revenues and making numerous misstatements to the SEC. Taber was charged with accounting fraud and violating the internal control and books and records rules. Taber settled the case in 2004 by consenting to a court injunction prohibiting future violations, a permanent bar from serving as a public company officer or director, and a permanent bar from “appearing or practicing before the Commission as an accountant.”
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