- Chief Compliance Officer and VP of Legal Affairs, Arrow Electronics
By 
Aaron Nicodemus2024-09-19T15:59:00
Waves of fallout from the collapse of cryptocurrency trading platform FTX continue to ripple, as accounting firm Prager Metis has learned.
The firm agreed to pay nearly $2 million in penalties to settle two enforcement actions by the Securities and Exchange Commission (SEC) related to Prager Metis’ audit work for FTX and other companies. The SEC said the firm committed “negligence-based fraud” by falsely represented that its audits of FTX complied with generally accepted accounting standards (GAAS), and violated its own policies and procedures by not adequately assessing whether it had the competency to audit FTX, the agency announced in a press release Tuesday.
The biggest problem with Prager Metis’ audit of FTX, the SEC said, was that the firm apparently did not fully understand risks posed by the financially intertwined relationship between FTX and Alameda Research, a crypto research fund controlled by FTX founder Sam Bankman-Fried. That connection, and the co-mingling of funds between the two entities, would prove to be FTX’s undoing and were the focus of a $12.7 billion settlement with the Commodity Futures Trading Commission in August.
THIS IS MEMBERS-ONLY CONTENT. To continue reading, choose one of the options below.
News and analysis for the well-informed compliance or audit exec. Select an option and click continue.
Annual Membership $499 Value offer
Full price one year membership with auto-renewal.
Membership $599
One-year only, no auto-renewal.
FTX Trading and its sister cryptocurrency exchange Alameda Research will pay $12.7 billion to settle charges laid by the Commodity Futures Trading Commission that the two companies violated the Commodity Exchange Act and CFTC regulations.
Why the wild disparity in the sentences of Binance’s Changpeng Zhao and FTX’s Sam Bankman-Fried? Aaron Nicodemus argues the performance of the compliance teams at the two cryptocurrency exchanges was as big a contrast as the penalties earned by their respective founders.
The Federal Reserve Board placed restrictions on Washington-based Farmington State Bank after taking issue with how the liquidating financial institution changed its business plan without seeking proper approvals.
USAA Federal Savings Bank has been hit with its third cease and desist order from the Treasury Department’s Office of the Comptroller of the Currency in the past five years for failing to correct unsafe and unsound banking practices.
Becton Dickinson medical device company will pay $175 million for “repeatedly” misleading investors about its Alaris infusion pump, a product the company knew was flawed and was sold without the required patient-safety approvals, the Securities and Exchange Commission said.
The Securities and Exchange Commission charged bankrupt fashion retailer Express with failing to disclose nearly $1 million in perks to a former chief executive, but did not levy a financial penalty thanks to its cooperation, the SEC said.
