Grant Thornton to settle charges for $3 million penalty

Freeman Staff

Dec. 2, 2015

MILWAUKEE — Grant Thornton LLP and two of its partners agreed to forfeit approximately $1.5 million in audit fees and interest and to pay a $3 million penalty after the Securities and Exchange Commission alleged the parties ignored red flags and fraud risks while conducting deficient audits of two publicly traded companies. According to the SEC, those two companies wound up facing SEC enforcement actions for improper accounting and other violations.

“Audit firms must be held responsible when systemic failures such as inadequate engagement procedures, staffing, or supervision cause the firms’ work to fall significantly short of expected standards, particularly when multiple audits and engagements are involved,” said Andrew J. Ceresney, director of the SEC’s Division of Enforcement, in a statement.

In December 2014, the SEC announced fraud charges against two former ALC executives accused of making false disclosures and manipulating internal books and records by listing fake occupants at some senior residences in order to meet lease covenant requirements.  Earlier this year, the SEC charged Broadwind and senior officers with accounting and disclosure violations that prevented investors from knowing that reduced business was damaging the company’s long-term financial prospects.