The Securities and Exchange Commission is finally doing something that desperately needed to be done: Suing the auditors of a failed bank that got caught cooking its books.
Wednesday the SEC's enforcement division accused two accountants at KPMG LLP of engaging in unprofessional conduct during their 2008 audit of TierOne Corp., a Lincoln, Neb.-based lender that had about $3 billion in assets when it collapsed in 2010. The agency hasn't reached settlements with either of the men, John Aesoph, 40, and Darren Bennett, 35, and their lawyers didn't immediately return phone calls.
The SEC's administrative order accuses the pair of "failing to subject TierOne's loan loss estimates one of the highest risk areas of the audit to appropriate scrutiny." It also said they "violated numerous PCAOB audit standards, failed to obtain sufficient competent evidential matter to support their audit conclusions, and failed to exercise due professional care and appropriate professional skepticism." (PCAOB stands for Public Company Accounting Oversight Board.)