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October 31, 2016

Posted  November 7, 2016

New York-based audit firm PFK O’Connor Davies and a senior partner of the firm, Domenick F. Consolo, will pay $555,000 collectively to settle charges that they issued fraudulent audit reports in connection with municipal bond offerings by the town of Ramapo, N.Y. and its local development corporation.  The SEC’s order finds that PFK and Consolo allowed Ramapo to record a $3.08 million receivable in its general fund for a property sale that Consolo knew had not occurred.  Consolo ignored red flags and relied on false representations by Ramapo officials about certain other receivables, transfers, and liabilities.  PFK failed to take appropriate steps to mitigate the risk of material misstatements even after senior management became aware that Ramapo’s financial statements were the subject of multiple law enforcement investigations and Consolo received complaints about possible fraud.  SEC

Tagged in: Securities Fraud,