Deloitte Japan has agreed to a $2 million penalty to settle charges with the Securities and Exchange Commission over independence violations.

The SEC says Deloitte Japan issued audit reports for an unnamed foreign private issuer while “dozens” of Deloitte Japan employees, including former CEO Futomichi Amano and former director of independence Yuji Itagaki, had bank accounts with a subsidiary of the company. SEC rules prohibit auditors from having bank accounts with audit clients with balances that exceed insured limits.

According to the SEC’s enforcement order, Deloitte Japan discovered in February 2014 during a routine independence examination that Amano had an account balance with the subsidiary bank exceeding the depository insurance limits. Amano’s lump-sum deposit of his partnership compensation in 2013 was enough alone to exceed the limit, the SEC said.

Despite the discovery in early 2014, the firm did not adequately communicate the issue with the audit client until mid-2015, the SEC says. After voluntarily notifying the SEC, Deloitte Japan launched an investigation and discovered nearly 90 Deloitte Japan employees had financial relationships with the audit client that compromised independence, including Amano and Itagaki.

The SEC says many of the compromising circumstances involved the firm’s special distributions of year-end partnership compensation directly into personal accounts in late 2013 and late 2014. Although Deloitte Japan’s office of independence knew that the 2013 payments caused at least two violations, the firm repeated this same process in 2014, causing additional violations,” the SEC says. Amano was among those who twice received partnership compensation into his account to cause the independence violation, the SEC says.

Deloitte Japan’s reputation and risk office did not adequately supervise or staff the independence office, the SEC says, but the firm more than tripled the staffing in its independence office as the violations unfolded. The firm also revised its policy on identifying those who violate independence rules by name, the privacy around which earlier contributed to miscommunications and difficulties in correcting problems, the SEC said.

In addition to the $2 million penalty for the firm, the SEC barred Amano for two years and Igataki for one, with each permitted to apply for reinstatement. Deloitte Canada also recently resolved an independence problem with the Public Company Accounting Oversight Board.

A Deloitte spokesman said the firm is pleased to have resolved the matter. "Since this issue came to light, Deloitte Japan has taken definitive action to enhance the firm’s independence processes and controls," the spokesman said. "We remain committed to delivering the highest quality services to our clients in accordance with professional standards and regulatory requirements.”