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The U.S. Securities and Exchange Commission (SEC) has accused accounting firm Friedman LLP, which provided audit services to the issuer of the stablecoin Tether in 2017, of “serial violations of federal securities laws” and “inappropriate professional conduct.”
The agency found that from 2017 to 2020, when conducting audits for the Chinese grocery store chain iFresh and another unnamed firm, Friedman LLP, did not comply with the standards of the Public Company Accounting Oversight Board.
The auditor is charged with sloppy accounting practices, including his failure to “react to the risks of fraud” and “exercise due professional care and professional skepticism.”
Although the document does not directly mention Tether, Friedman LLP provided services to Tether from May 2017 to January 2018, before terminating the professional relationship due to insufficiently fast auditing.
To settle the SEC claims, Friedman LLP will pay more than $1.5 million in total cash compensation and provide additional employee training.
Recall that in February 2012, the Bitfinex cryptocurrency exchange and Tether entered into an agreement with the New York State Attorney General’s Office in the case of the company’s financial transactions related to the loss of $850 million. As part of the settlement, Bitfinex and Tether paid $18.5 million to the State of New York.
The companies later paid civil penalties to CFTC for a total of $42.5 million.
Last week, a court in New York ordered Tether Limited to provide financial documents to evaluate USDT stablecoin reserves as part of a possible market manipulation trial.
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