Dean Conway Interviewed in National Law Journal: “SEC Accounting Fraud Unit Puts 'Back-to-Basics' Enforcement Into Action, Lawyers Say”

Dean Conway was interviewed in a National Law Journal article titled “SEC Accounting Fraud Unit Puts 'Back-to-Basics' Enforcement Into Action, Lawyers Say.” The article discusses the Security and Exchange Commission’s (SEC) creation of a specialized accounting and reporting-focused enforcement unit amid its plans to rebuild its fraud-fighting capabilities under new leadership.

The creation of the Financial Reporting and Accounting Unit is a tangible example of the seriousness with which the commission is taking enforcing financial fraud, said Conway. “To put people with that skillset into one unit is a significant step to bringing more accounting fraud cases,” he added. “It really does take the right team of accountants and lawyers who understand the accounting financial fraud subject area.”

Conway cautioned against interpreting the new unit as a sign that the SEC is preparing a crackdown on major accounting firms, noting that auditors can often present a defense when management misrepresents information to them. The more likely enforcement focus, he said, is on individual auditors whose conduct falls below professional standards. Audit partners and other individuals involved in the audit process may face heightened scrutiny even in cases where the firm itself is not charged.

“If I were in a big firm or any size firm, I would be concerned about the 102(e) liability,” he added, referencing the rule that gives the SEC authority to suspend accountants and other professionals from practicing before the commission if they engaged in improper conduct.

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This article was republished by Global Investigations Review.