- Chief Compliance Officer and VP of Legal Affairs, Arrow Electronics
By 
Kyle Brasseur2024-05-07T18:58:00
Big Four firms PwC and EY were each penalized by the Financial Reporting Council (FRC) for alleged shortcomings during their respective audits at collapsed investment firm London Capital & Finance (LCF).
Both audit firms were assessed fines of 7 million pounds (U.S. $8.8 million), the FRC announced Tuesday. PwC earned a discount of 30 percent for admissions and early disposal and will pay £4.9 million (U.S. $6.1 million), while EY was awarded the same plus an additional 10 percent off for “exceptional” cooperation down to about £4.4 million (U.S. $5.5 million).
LCF sold £236 million (U.S. $295 million) worth of bonds promising investor returns of 6.5 to 8 percent a year. The investment firm entered administration in January 2019, with more than 11,000 investors suffering significant losses.
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PricewaterhouseCoopers agreed to pay 15 million pounds (U.S. $19.5 million) for failing to report suspicions of fraud taking place at investment firm London Capital & Finance before it collapsed, the Financial Conduct Authority announced.
The Financial Reporting Council ordered a unit Ernst & Young UK to pay 296,000 pounds (U.S. $376,000) over the firm’s 2021 audit of Russia mining group Evraz.
The U.K.’s Financial Reporting Council fined audit firm MacIntyre Hudson (MHA) and two employees for breaching the agency’s requirements.
First Horizon Advisors will pay a $325,000 fine to settle allegations from the Securities and Exchange Commission that it violated Regulation Best Interest in part due to issues with incorporating a merged firms’ accounts into its systems.
Gatekeepers including chief financial officers and the chair of the audit committee have a responsibility to shareholders to report fraud wherever they find it–especially when that fraud involves an artificial intelligence tool meant to combat fraud.
Fines for off-channel communications use by employees just keep on coming, with 12 municipal advisory firms fined a total of $1.3 million in the latest Securities and Exchange Commission sweep.
