The Securities and Exchange Commission has settled its action against Big 4 affiliates in China that stymied investigations into possible accounting fraud by refusing to hand over audit work papers.

The SEC fined each of the Big 4 affiliates $500,000 and imposed other sanctions while acknowledging that the firms eventually began providing documents. The settlement requires the firms—Deloitte Touche Tohmatsu, Ernst & Young Hua Ming, KPMG Huazhen, and PricewaterhouseCoopers Zhong Tian—to continue to satisfy SEC requests for similar materials over the next four years.

A fifth firm included in the original action—Dahua, formerly part of the BDO network—is not included in the current settlement agreement. The SEC said the proceedings against that firm continue.

As part of the current settlement, the four firms admit they did not produce documents before the SEC instituted its administrative proceedings, but admit or deny no other findings in the settlement order.

The firms refused to hand over the documents the SEC demanded citing law in China that forbids providing information to regulators outside China. The firms said partners would go to jail for life in China if they complied with the SEC documentation demands. That lead to a 12-day hearing in 2013 followed by a January 2014 decision by an SEC administrative law judge to bar the firms from participating in U.S. capital markets for 6 months.

A six-month bar on all Big 4 affiliates in China would have left China-based companies audited by those firms unable to comply with U.S. requirements to provide audited financial statements to the SEC. The bar was delayed as officials tried to negotiate a solution. In the settlement announcement, the SEC acknowledged the assistance of the China Securities Regulatory Commission in receiving multiple productions of work papers from the firms after the 2013 hearing.

“The settlement is an important milestone in the SEC’s ability to obtain documents from China,” said Antonia Chion, associate director of the SEC’s enforcement division. “Of course, we hope that it is an enduring milestone. The settlement provides a path forward for obtaining productions and enhanced future cooperation from the Big 4 firms.”

Under the settlement, the SEC can take a variety of different actions against the firms if they fail to produce further documents as specified in the agreement. Those could include an automatic six-month bar on a single firm’s performance of certain audit work, the start of a new proceeding against a given firm, or the resumption of the current proceeding against all four firms.

The four firms jointly provided a statement regarding the settlement: “We are pleased to have reached a settlement with the SEC in the proceeding related to the production of Chinese audit work papers to the SEC," they said. "The firms’ ability to continue to serve all their respective clients is not affected by this settlement.” EY also said separately it was pleased to see the matter resolved given the potential for harm to investors and capital markets in general if it had escalated. "We look forward to continued progress by the U.S. and Chinese regulators on all matters related to cross border cooperation," EY said.