September 9, 2015

The SEC charged national audit firm BDO USA and five of its partners with dismissing red flags and issuing false and misleading unqualified audit opinions about the financial statements of staffing services company General Employment Enterprises, after failing to obtain reasonable and coherent explanations about why $2.3 million (approximately half of the company’s assets) had gone missing.  In a related action, the SEC filed fraud charges against Stephen Pence, then General Employment Enterprises’ chairman of the board and majority shareholder, and a former U.S. Attorney and lieutenant government of Kentucky.  BDO agreed to admit wrongdoing and pay disgorgement and penalties of $2.1 million.  BDO’s five partners also settled the charges brought against them and agreed to pay $75,000 in penalties collectively.  The SEC’s litigation with Stephen Pence continues.  SEC

Tagged in: Accounting Fraud, Securities Fraud,