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Newport Beach, Calif.-based audit firm Anton & Chia LLP and six of its current or former officials ignored red flags that should have alerted them to fraudulent financial reporting by three of the firm’s audit clients, the SEC alleged Dec. 4.The clients—microcap companies Accelera Innovations Inc., Premier Holding Corp., and CannaVEST Corp.—also are facing related antifraud charges.“Accelera’s public filings allegedly included revenue, assets, and liabilities from an entirely different company. The Enforcement Division alleges that instead of standing in the way of Accelera’s fraud, Anton & Chia facilitated it,” the Securities and Exchange Commission said in a release.Two of the Anton & Chia officials, partner Richard J. Koch and former partner Rahuldev Gandhi, settled the allegations. They each agreed to pay a $15,000 penalty and to be suspended from SEC practice for two years and three years respectively.
Allegations against co-owners Gregory A. Wahl and Georgia Chung, former partner Michael Deutchman, and former audit manager Tommy Shek will be heard by an administrative law judge who will decide what, if any, remedial sanctions, are called for.
Edward Gartenberg, Gartenberg Gelfand Hayton LLP, Sherman Oaks, Calif., who represents Anton & Chia, Wahl, and Chung, said his clients “deny wrongdoing and intend to vigorously defend.”
Deutchman’s lawyer John R. Armstrong, Horwitz & Armstrong PC, a Professional Law Corporation, Lake Forest, Calif., said he wasn’t prepared to comment.
Counsel to Shek didn’t respond immediately to a request for comment. Counsel to Premier and two individual defendants couldn’t be identified.
The suit against Premier and two individuals was filed Dec. 4 in the U.S. District Court for the Southern District of New York. The lawsuits against the other two companies were filed earlier this year.
The cases are In re Anton & Chia LLP , S.E.C., Admin. Proc. File No. 3-18292, 12/4/17 ; In re Koch , S.E.C., Admin. Proc. File No. 3-18293, 12/4/17 ; In re Gandhi , S.E.C., Admin. Proc. File No. 3-18294, 12/4/17 ; SEC v. Premier Holding Corp. , S.D.N.Y., 1:17-cv-09485, 12/4/17 .
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