In re MICHAEL BELLACH

 
 
UNITED STATES OF AMERICA 
Before the 
SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 88896 / May 18, 2020 
 
ACCOUNTING AND AUDITING ENFORCEMENT 
Release No. 4142 / May 18, 2020 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-19804 
 
 
 
In the Matter of 
 
MICHAEL BELLACH, CPA, 
 
Respondent. 
 
ORDER INSTITUTING PUBLIC 
ADMINISTRATIVE AND CEASE-AND- 
 AND- DESIST PROCEEDINGS PURSUANT TO 
SECTIONS 4C AND 21C OF THE SECURITIES 
EXCHANGE ACT OF 1934 AND RULE 102(e) 
OF THE COMMISSION’S RULES OF 
PRACTICE, MAKING FINDINGS, AND 
IMPOSING REMEDIAL SANCTIONS AND A 
CEASE-AND-DESIST ORDER 
 
I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate that public 
administrative and cease-and-desist proceedings be, and hereby are, instituted against Michael 
Bellach, CPA (“Respondent” or “Bellach”) pursuant to Sections 4C
1
 and 21C of the Securities 
Exchange Act of 1934 (“Exchange Act”) and Rules 102(e)(1)(ii) and 102(e)(1)(iii) of the 
Commission’s Rules of Practice.
2
 
                                                 
1
 Section 4C provides, in relevant part, that:  
 
The Commission may censure any person, or deny, temporarily or permanently, to any person the 
privilege of appearing or practicing before the Commission in any way, if that person is found . . . (1) 
not to possess the requisite qualifications to represent others; (2) to be lacking in character or integrity, 
or to have engaged in unethical or improper professional conduct; or (3) to have willfully violated, or 
willfully aided and abetted the violation of, any provision of the securities laws or the rules and 
regulations issued thereunder. 
 
2
 Rule 102(e)(1)(ii) provides, in pertinent part, that: 
 
The Commission may . . . deny, temporarily or permanently, the privilege of appearing or practicing 
before it . . . to any person who is found to be lacking in character or integrity or to have engaged in 
unethical or improper professional conduct. 

2 
II. 
 
In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) that the Commission has determined to accept.  Solely for the purpose 
of these proceedings and any other proceedings brought by or on behalf of the Commission, or to 
which the Commission is a party, and without admitting or denying the findings herein, except as 
to the Commission’s jurisdiction over him and the subject matter of these proceedings, which are 
admitted, Respondent consents to the entry of this Order Instituting Public Administrative and 
Cease-and-Desist Proceedings Pursuant to Sections 4C and 21C of the Securities Exchange Act of 
1934 and Rule 102(e) of the Commission’s Rules of Practice, Making Findings, and Imposing 
Remedial Sanctions and a Cease-and-Desist Order (“Order”), as set forth below.   
 
III. 
 
 On the basis of this Order and Respondent’s Offer, the Commission finds
3
 that: 
 
SUMMARY 
 
1. This matter involves misconduct by a now-former KPMG audit partner in 
connection with an examination on an internally-administered training course.  The purpose of the 
examination was to test whether KPMG audit professionals understood certain accounting and 
auditing principles.  In late 2018, the former audit partner, Michael Bellach, sent pictures of 
questions and answers to the examination that he had failed to a colleague, a now-former lead audit 
engagement partner on one of Bellach’s engagements, at the lead partner’s request. 
 
2. After learning of KPMG’s internal investigation of its audit professionals’ cheating 
on internal training exams, the lead partner encouraged Bellach to delete his text messages with the 
lead partner in which Bellach had relayed the questions and answers to the exam.  Bellach did so 
after receiving a notice from the firm requiring him to preserve them.  
 
3. Bellach is required, both by the rules of the Public Company Accounting Oversight 
Board (“PCAOB”) and by the Code of Professional Conduct of the American Institute of Certified 
Public Accountants (“AICPA”), to act with integrity in connection with performing professional 
                                                 
 
 Rule 102(e)(1)(iii) provides, in pertinent part, that: 
 
The Commission may . . . deny, temporarily or permanently, the privilege of appearing or practicing 
before it . . . to any person who is found...to have willfully violated, or willfully aided and abetted the 
violation of any provision of the Federal securities laws or the rules and regulations thereunder. 
 
3
 The findings herein are made pursuant to Respondent’s Offer of Settlement and are not binding on any 
other person or entity in this or any other proceeding.   
 

3 
services.
4
  Certified public accountants are required to “be, among other things, honest and candid 
within the constraints of client confidentiality.”
5
  Additionally, Bellach is prohibited from 
committing acts “discreditable to the profession.”
6
  By the misconduct described herein, Bellach 
failed to meet these standards.  
 
RESPONDENT 
 
4. Michael Bellach, 45, of New York, New York was a partner in KPMG’s audit 
practice until March 2019.  Bellach is licensed as a CPA in Connecticut and New York.    
OTHER RELEVANT PERSON AND ENTITY 
 
5. Timothy Daly, 53, of Weston, Connecticut was a partner in KPMG’s audit practice 
until March 2019.  Daly is licensed as a CPA in New York and was previously licensed in 
Connecticut.  The Commission has charged Daly for his role in the misconduct described in this 
Order. 
 
6. KPMG LLP is a Delaware limited liability partnership and PCAOB-registered 
accounting firm.  Headquartered in New York, New York, KPMG is the U.S. member firm of 
KPMG International Cooperative, a Swiss entity. 
 
FACTS 
 
A. Professional Education Requirements for KPMG Auditor Personnel  
 
7. As an accountant licensed in Connecticut and New York, Bellach was required to 
complete a minimum number of continuing professional education (“CPE”) courses.  KPMG 
requires its audit professionals, including Bellach, to complete additional training in excess of state 
requirements and to take examinations generally not mandated by state accountancy boards.  These 
training requirements vary by position, role, and industry, and are designed by the firm to be 
relevant to the audit work its professionals are performing. 
 
8. To help its audit professionals satisfy these requirements, KPMG administers its 
own set of online training programs that also qualify for CPE credit.  KPMG requires its auditors to 
pass an examination at the conclusion of each online training program.  Audit professionals are 
given three opportunities to pass each examination.  If one of KPMG’s audit professionals is 
                                                 
4
  PCAOB Rule 3500T requires Bellach to maintain integrity when performing any professional service in 
connection with the preparation or issuance of any audit report.  As an AICPA member, Bellach is required to 
comply with the AICPA’s Code of Professional Conduct, which requires him to maintain integrity in connection 
with all professional services. 
 
5
 See “Principles of Professional Conduct,” ET Section 54 (available at 
https://www.aicpa.org/Research/Standards/CodeofConduct/DownloadableDocuments/2011June1CodeOfProfessiona
lConduct.pdf).  Codified as AICPA Code 0.300.040. 
 
6
 AICPA Code of Professional Conduct 1.400.001 (“Acts Discreditable Rule”).   

4 
unable to pass after two attempts, their Performance Management Leader is notified.  If they are 
unable to pass after three attempts, the consequences are more significant:  they are required to re-
take the training; they are prohibited from conducting audit work until they pass the exam; and 
others at the firm may be notified.  Audit professionals also understood that failing to pass an exam 
could lead to their compensation being reduced. 
 
B. Daly Solicits Test Answers from Bellach 
 
9. In 2017 Daly, as lead partner on a significant KPMG engagement, added Bellach as 
the second partner on the audit.  By late summer 2018, Bellach understood that Daly intended to 
recommend Bellach become lead audit engagement partner when Daly rotated off the engagement. 
 
10. In the fall of 2018, KPMG required its audit staff to complete trainings and exams 
related to a new lease accounting standard.  In late September, in response to Daly asking about his 
progress on the KPMG lease testing, Bellach told Daly he had completed the last lease exam, and it 
was difficult.  Bellach also told Daly he had pictures of the questions and his responses that he had 
taken after he failed his first attempt for his own use in preparing to retake the exam.  In early 
October, Daly sent Bellach a text message asking for the photographs of the failed lease exam, and 
Bellach texted the images back to Daly. 
 
C. Daly Encourages Bellach to Delete the Text Containing the Test Photos 
 
11. After learning of potential cheating on internal training exams, KPMG leadership 
began an internal investigation.  The firm’s Board of Directors then formed a Special Committee 
led by an independent board member to oversee an investigation of this conduct. 
 
12. As part of its investigation, KPMG’s Office of General Counsel emailed an “Urgent 
Request” to all KPMG personnel to preserve all documents related to KPMG’s training 
requirements or training sessions.  The November 1, 2018 email emphasized the importance of 
“strict compliance” with the document preservation order, cautioning that failure to comply could 
expose individuals and the firm to serious consequences.   
 
13. After receiving the November 1 document preservation notice, Daly deleted the text 
message and photos of the failed lease exam Bellach had sent him and encouraged Bellach to do 
the same.  After repeated inquiries from Daly, Bellach also deleted the texts with Daly, but not the 
pictures of the exam.  Bellach later told counsel representing the Special Committee overseeing 
KPMG’s internal investigation about his deletion of the text. 
 
 
 
 
 
 
 
 

5 
VIOLATIONS 
 
14. As a result of the conduct described above, Bellach willfully
7
 violated PCAOB 
Rule 3500T, which requires Bellach to comply with ethics standards, including to maintain 
integrity, as described in the AICPA’s Code of Professional Conduct when performing any 
professional service in connection with the preparation or issuance of any audit report,
8
 within the 
meaning of Section 4C(a)(3) of the Exchange Act and Rule 102(e)(1)(iii) of the Commission’s 
Rules of Practice. 
 
15. The AICPA Code of Professional Conduct requires that a member not commit any 
act discreditable to the profession.  AICPA Code of Professional Conduct 1.400.001.  As a result 
of the conduct described above, Bellach failed to comply with AICPA Code of Professional 
Conduct 1.400.001 within the meaning of Section 4C(a)(2) of the Exchange Act and Rule 
102(e)(1)(ii) of the Commission’s Rules of Practice. 
 
FINDINGS 
 
16. Based on the foregoing, the Commission finds that Bellach willfully violated 
PCAOB Rule 3500T within the meaning of Section 4C(a)(3) of the Exchange Act and Rule 
102(e)(1)(iii) of the Commission’s Rules of Practice. 
 
17. Based on the foregoing, the Commission finds a basis to impose remedies against 
Bellach pursuant to Section 4C(a)(2) of the Exchange Act and Rule 102(e)(1)(ii) of the 
Commission’s Rules of Practice, because Bellach engaged in conduct within their purview.  Those 
provisions allow the Commission to impose remedies when a person has been found to have 
engaged in conduct “lacking in character or integrity or [has] engaged in unethical or improper 
professional conduct.” 
 
 
 
 
 
 
 
                                                 
7
 “Willfully,” for purposes of imposing relief under Exchange Act Section 4C(a)(3) and Rule 102(e)(1)(iii) 
“means no more than that the person charged with the duty knows what he is doing.”  Wonsover v. SEC, 205 F.3d 
408, 414 (D.C. Cir. 2000) (quoting Hughes v. SEC, 174 F.2d 969, 977 (D.C. Cir. 1949)).  There is no requirement 
that the actor “also be aware that he is violating one of the Rules or Acts.”  Tager v. SEC, 344 F.2d 5, 8 (2d Cir. 
1965). 
 
8
  The rule requires auditors to comply with the AICPA’s Code of Professional Conduct Rule 102, and 
interpretations and rulings thereunder, as in existence on April 16, 2003.  Although PCAOB Rule 3500T references 
the AICPA Code as in existence on April 16, 2003, the definition of integrity remains identical to the current 
definitions in the Code of Professional Conduct promulgated by the AICPA and applicable to current members of 
the AICPA. 
 

6 
IV. 
 
 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 
agreed to in Respondent Bellach’s Offer. 
 
 Accordingly, it is hereby ORDERED, effective immediately, that: 
 
A. Bellach shall cease and desist from committing or causing any violations and any 
future violations of PCAOB Rule 3500T. 
 
 B. Bellach is denied the privilege of appearing or practicing before the Commission as 
an accountant. 
 
 C. After two years from the date of this order, Bellach may request that the 
Commission consider his reinstatement by submitting an application (attention:  Office of the 
Chief Accountant) to resume appearing or practicing before the Commission as: 
      
       1. a preparer or reviewer, or a person responsible for the preparation or review, 
of any public company’s financial statements that are filed with the 
Commission (other than as a member of an audit committee, as that term is 
defined in Section 3(a)(58) of the Securities Exchange Act of 1934).  Such 
an application must satisfy the Commission that Bellach’s work in his 
practice before the Commission as an accountant will be reviewed either by 
the independent audit committee of the public company for which he works 
or in some other acceptable manner, as long as he practices before the 
Commission in this capacity; and/or 
 
  2.    a preparer or reviewer, or a person responsible for the preparation or review, 
of any public company’s financial statements that are filed with the 
Commission as a member of an audit committee, as that term is defined in 
Section 3(a)(58) of the Securities Exchange Act of 1934.  Such an 
application will be considered on a facts and circumstances basis with 
respect to such membership, and the applicant’s burden of demonstrating 
good cause for reinstatement will be particularly high given the role of the 
audit committee in financial and accounting matters; and/or 
 
  3. an independent accountant.   
 
  Such an application must satisfy the Commission that: 
      
           (a) Bellach, or the public accounting firm with which he is associated, 
is registered with the PCAOB in accordance with the Sarbanes-
Oxley Act of 2002, and such registration continues to be effective; 
 

7 
   (b) Bellach, or the registered public accounting firm with which he is 
associated, has been inspected by the PCAOB and that inspection 
did not identify any criticisms of or potential defects in the 
respondent’s or the firm’s quality control system that would 
indicate that Bellach will not receive appropriate supervision; 
   (c) Bellach has resolved all disciplinary issues with the PCAOB, and 
has complied with all terms and conditions of any sanctions 
imposed by the PCAOB (other than reinstatement by the 
Commission); and 
 
   (d) Bellach acknowledges his responsibility, as long as he appears or 
practices before the Commission as an independent accountant, to 
comply with all requirements of the Commission and the PCAOB, 
including, but not limited to, all requirements relating to 
registration, inspections, concurring partner reviews and quality 
control standards.   
 
D. The Commission will consider an application by Bellach to resume appearing or 
practicing before the Commission provided that his state CPA license is current and he has 
resolved all other disciplinary issues with the applicable state boards of accountancy.  However, 
if state licensure is dependent on reinstatement by the Commission, the Commission will 
consider an application on its other merits.  The Commission’s review may include consideration 
of, in addition to the matters referenced above, any other matters relating to Bellach’s character, 
integrity, professional conduct, or qualifications to appear or practice before the Commission as 
an accountant.  Whether an application demonstrates good cause will be considered on a facts 
and circumstances basis with due regard for protecting the integrity of the Commission’s 
processes. 
 
 By the Commission. 
 
 
 
       Vanessa A. Countryman 
       Secretary 
 
 
 

UNITED STATES OF AMERICA 

Before the 

SECURITIES AND EXCHANGE COMMISSION 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 88896 / May 18, 2020 

 

ACCOUNTING AND AUDITING ENFORCEMENT 

Release No. 4142 / May 18, 2020 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-19804 

 

 

 

In the Matter of 

 

MICHAEL BELLACH, CPA, 

 

Respondent. 

 

ORDER INSTITUTING PUBLIC 

ADMINISTRATIVE AND CEASE-AND- 

 AND- DESIST PROCEEDINGS PURSUANT TO 

SECTIONS 4C AND 21C OF THE SECURITIES 

EXCHANGE ACT OF 1934 AND RULE 102(e) 

OF THE COMMISSION’S RULES OF 

PRACTICE, MAKING FINDINGS, AND 

IMPOSING REMEDIAL SANCTIONS AND A 

CEASE-AND-DESIST ORDER 

 

I. 
 

 The Securities and Exchange Commission (“Commission”) deems it appropriate that public 

administrative and cease-and-desist proceedings be, and hereby are, instituted against Michael 

Bellach, CPA (“Respondent” or “Bellach”) pursuant to Sections 4C1 and 21C of the Securities 

Exchange Act of 1934 (“Exchange Act”) and Rules 102(e)(1)(ii) and 102(e)(1)(iii) of the 

Commission’s Rules of Practice.2 

                                                 
1 Section 4C provides, in relevant part, that:  

 

The Commission may censure any person, or deny, temporarily or permanently, to any person the 

privilege of appearing or practicing before the Commission in any way, if that person is found . . . (1) 

not to possess the requisite qualifications to represent others; (2) to be lacking in character or integrity, 

or to have engaged in unethical or improper professional conduct; or (3) to have willfully violated, or 

willfully aided and abetted the violation of, any provision of the securities laws or the rules and 

regulations issued thereunder. 

 
2 Rule 102(e)(1)(ii) provides, in pertinent part, that: 

 

The Commission may . . . deny, temporarily or permanently, the privilege of appearing or practicing 

before it . . . to any person who is found to be lacking in character or integrity or to have engaged in 

unethical or improper professional conduct. 



2 

II. 

 

In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (the “Offer”) that the Commission has determined to accept.  Solely for the purpose 

of these proceedings and any other proceedings brought by or on behalf of the Commission, or to 

which the Commission is a party, and without admitting or denying the findings herein, except as 

to the Commission’s jurisdiction over him and the subject matter of these proceedings, which are 

admitted, Respondent consents to the entry of this Order Instituting Public Administrative and 

Cease-and-Desist Proceedings Pursuant to Sections 4C and 21C of the Securities Exchange Act of 

1934 and Rule 102(e) of the Commission’s Rules of Practice, Making Findings, and Imposing 

Remedial Sanctions and a Cease-and-Desist Order (“Order”), as set forth below.   

 

III. 

 

 On the basis of this Order and Respondent’s Offer, the Commission finds3 that: 

 

SUMMARY 

 

1. This matter involves misconduct by a now-former KPMG audit partner in 

connection with an examination on an internally-administered training course.  The purpose of the 

examination was to test whether KPMG audit professionals understood certain accounting and 

auditing principles.  In late 2018, the former audit partner, Michael Bellach, sent pictures of 

questions and answers to the examination that he had failed to a colleague, a now-former lead audit 

engagement partner on one of Bellach’s engagements, at the lead partner’s request. 

 

2. After learning of KPMG’s internal investigation of its audit professionals’ cheating 

on internal training exams, the lead partner encouraged Bellach to delete his text messages with the 

lead partner in which Bellach had relayed the questions and answers to the exam.  Bellach did so 

after receiving a notice from the firm requiring him to preserve them.  

 

3. Bellach is required, both by the rules of the Public Company Accounting Oversight 

Board (“PCAOB”) and by the Code of Professional Conduct of the American Institute of Certified 

Public Accountants (“AICPA”), to act with integrity in connection with performing professional 

                                                 
 

 Rule 102(e)(1)(iii) provides, in pertinent part, that: 

 

The Commission may . . . deny, temporarily or permanently, the privilege of appearing or practicing 

before it . . . to any person who is found…to have willfully violated, or willfully aided and abetted the 

violation of any provision of the Federal securities laws or the rules and regulations thereunder. 

 
3 The findings herein are made pursuant to Respondent’s Offer of Settlement and are not binding on any 

other person or entity in this or any other proceeding.   

 



3 

services.4  Certified public accountants are required to “be, among other things, honest and candid 

within the constraints of client confidentiality.”5  Additionally, Bellach is prohibited from 

committing acts “discreditable to the profession.”6  By the misconduct described herein, Bellach 

failed to meet these standards.  

 

RESPONDENT 

 

4. Michael Bellach, 45, of New York, New York was a partner in KPMG’s audit 

practice until March 2019.  Bellach is licensed as a CPA in Connecticut and New York.    

OTHER RELEVANT PERSON AND ENTITY 

 

5. Timothy Daly, 53, of Weston, Connecticut was a partner in KPMG’s audit practice 

until March 2019.  Daly is licensed as a CPA in New York and was previously licensed in 

Connecticut.  The Commission has charged Daly for his role in the misconduct described in this 

Order. 

 

6. KPMG LLP is a Delaware limited liability partnership and PCAOB-registered 

accounting firm.  Headquartered in New York, New York, KPMG is the U.S. member firm of 

KPMG International Cooperative, a Swiss entity. 

 

FACTS 

 

A. Professional Education Requirements for KPMG Auditor Personnel  

 

7. As an accountant licensed in Connecticut and New York, Bellach was required to 

complete a minimum number of continuing professional education (“CPE”) courses.  KPMG 

requires its audit professionals, including Bellach, to complete additional training in excess of state 

requirements and to take examinations generally not mandated by state accountancy boards.  These 

training requirements vary by position, role, and industry, and are designed by the firm to be 

relevant to the audit work its professionals are performing. 

 

8. To help its audit professionals satisfy these requirements, KPMG administers its 

own set of online training programs that also qualify for CPE credit.  KPMG requires its auditors to 

pass an examination at the conclusion of each online training program.  Audit professionals are 

given three opportunities to pass each examination.  If one of KPMG’s audit professionals is 

                                                 
4  PCAOB Rule 3500T requires Bellach to maintain integrity when performing any professional service in 

connection with the preparation or issuance of any audit report.  As an AICPA member, Bellach is required to 

comply with the AICPA’s Code of Professional Conduct, which requires him to maintain integrity in connection 

with all professional services. 

 
5 See “Principles of Professional Conduct,” ET Section 54 (available at 

https://www.aicpa.org/Research/Standards/CodeofConduct/DownloadableDocuments/2011June1CodeOfProfessiona

lConduct.pdf).  Codified as AICPA Code 0.300.040. 

 
6 AICPA Code of Professional Conduct 1.400.001 (“Acts Discreditable Rule”).   

https://www.aicpa.org/Research/Standards/CodeofConduct/DownloadableDocuments/2011June1CodeOfProfessionalConduct.pdf
https://www.aicpa.org/Research/Standards/CodeofConduct/DownloadableDocuments/2011June1CodeOfProfessionalConduct.pdf


4 

unable to pass after two attempts, their Performance Management Leader is notified.  If they are 

unable to pass after three attempts, the consequences are more significant:  they are required to re-

take the training; they are prohibited from conducting audit work until they pass the exam; and 

others at the firm may be notified.  Audit professionals also understood that failing to pass an exam 

could lead to their compensation being reduced. 

 

B. Daly Solicits Test Answers from Bellach 

 

9. In 2017 Daly, as lead partner on a significant KPMG engagement, added Bellach as 

the second partner on the audit.  By late summer 2018, Bellach understood that Daly intended to 

recommend Bellach become lead audit engagement partner when Daly rotated off the engagement. 

 

10. In the fall of 2018, KPMG required its audit staff to complete trainings and exams 

related to a new lease accounting standard.  In late September, in response to Daly asking about his 

progress on the KPMG lease testing, Bellach told Daly he had completed the last lease exam, and it 

was difficult.  Bellach also told Daly he had pictures of the questions and his responses that he had 

taken after he failed his first attempt for his own use in preparing to retake the exam.  In early 

October, Daly sent Bellach a text message asking for the photographs of the failed lease exam, and 

Bellach texted the images back to Daly. 

 

C. Daly Encourages Bellach to Delete the Text Containing the Test Photos 

 

11. After learning of potential cheating on internal training exams, KPMG leadership 

began an internal investigation.  The firm’s Board of Directors then formed a Special Committee 

led by an independent board member to oversee an investigation of this conduct. 

 

12. As part of its investigation, KPMG’s Office of General Counsel emailed an “Urgent 

Request” to all KPMG personnel to preserve all documents related to KPMG’s training 

requirements or training sessions.  The November 1, 2018 email emphasized the importance of 

“strict compliance” with the document preservation order, cautioning that failure to comply could 

expose individuals and the firm to serious consequences.   

 

13. After receiving the November 1 document preservation notice, Daly deleted the text 

message and photos of the failed lease exam Bellach had sent him and encouraged Bellach to do 

the same.  After repeated inquiries from Daly, Bellach also deleted the texts with Daly, but not the 

pictures of the exam.  Bellach later told counsel representing the Special Committee overseeing 

KPMG’s internal investigation about his deletion of the text. 

 

 

 

 

 

 

 

 



5 

VIOLATIONS 

 

14. As a result of the conduct described above, Bellach willfully7 violated PCAOB 

Rule 3500T, which requires Bellach to comply with ethics standards, including to maintain 

integrity, as described in the AICPA’s Code of Professional Conduct when performing any 

professional service in connection with the preparation or issuance of any audit report,8 within the 

meaning of Section 4C(a)(3) of the Exchange Act and Rule 102(e)(1)(iii) of the Commission’s 

Rules of Practice. 

 

15. The AICPA Code of Professional Conduct requires that a member not commit any 

act discreditable to the profession.  AICPA Code of Professional Conduct 1.400.001.  As a result 

of the conduct described above, Bellach failed to comply with AICPA Code of Professional 

Conduct 1.400.001 within the meaning of Section 4C(a)(2) of the Exchange Act and Rule 

102(e)(1)(ii) of the Commission’s Rules of Practice. 

 

FINDINGS 

 

16. Based on the foregoing, the Commission finds that Bellach willfully violated 

PCAOB Rule 3500T within the meaning of Section 4C(a)(3) of the Exchange Act and Rule 

102(e)(1)(iii) of the Commission’s Rules of Practice. 

 

17. Based on the foregoing, the Commission finds a basis to impose remedies against 

Bellach pursuant to Section 4C(a)(2) of the Exchange Act and Rule 102(e)(1)(ii) of the 

Commission’s Rules of Practice, because Bellach engaged in conduct within their purview.  Those 

provisions allow the Commission to impose remedies when a person has been found to have 

engaged in conduct “lacking in character or integrity or [has] engaged in unethical or improper 

professional conduct.” 

 

 

 

 

 

 

 

                                                 
7 “Willfully,” for purposes of imposing relief under Exchange Act Section 4C(a)(3) and Rule 102(e)(1)(iii) 

“means no more than that the person charged with the duty knows what he is doing.”  Wonsover v. SEC, 205 F.3d 

408, 414 (D.C. Cir. 2000) (quoting Hughes v. SEC, 174 F.2d 969, 977 (D.C. Cir. 1949)).  There is no requirement 

that the actor “also be aware that he is violating one of the Rules or Acts.”  Tager v. SEC, 344 F.2d 5, 8 (2d Cir. 

1965). 

 
8  The rule requires auditors to comply with the AICPA’s Code of Professional Conduct Rule 102, and 

interpretations and rulings thereunder, as in existence on April 16, 2003.  Although PCAOB Rule 3500T references 

the AICPA Code as in existence on April 16, 2003, the definition of integrity remains identical to the current 

definitions in the Code of Professional Conduct promulgated by the AICPA and applicable to current members of 

the AICPA. 

 



6 

IV. 

 

 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 

agreed to in Respondent Bellach’s Offer. 

 

 Accordingly, it is hereby ORDERED, effective immediately, that: 

 

A. Bellach shall cease and desist from committing or causing any violations and any 

future violations of PCAOB Rule 3500T. 

 

 B. Bellach is denied the privilege of appearing or practicing before the Commission as 

an accountant. 

 

 C. After two years from the date of this order, Bellach may request that the 

Commission consider his reinstatement by submitting an application (attention:  Office of the 

Chief Accountant) to resume appearing or practicing before the Commission as: 

      

       1. a preparer or reviewer, or a person responsible for the preparation or review, 

of any public company’s financial statements that are filed with the 

Commission (other than as a member of an audit committee, as that term is 

defined in Section 3(a)(58) of the Securities Exchange Act of 1934).  Such 

an application must satisfy the Commission that Bellach’s work in his 

practice before the Commission as an accountant will be reviewed either by 

the independent audit committee of the public company for which he works 

or in some other acceptable manner, as long as he practices before the 

Commission in this capacity; and/or 

 

  2.    a preparer or reviewer, or a person responsible for the preparation or review, 

of any public company’s financial statements that are filed with the 

Commission as a member of an audit committee, as that term is defined in 

Section 3(a)(58) of the Securities Exchange Act of 1934.  Such an 

application will be considered on a facts and circumstances basis with 

respect to such membership, and the applicant’s burden of demonstrating 

good cause for reinstatement will be particularly high given the role of the 

audit committee in financial and accounting matters; and/or 

 

  3. an independent accountant.   

 

  Such an application must satisfy the Commission that: 

      

           (a) Bellach, or the public accounting firm with which he is associated, 

is registered with the PCAOB in accordance with the Sarbanes-

Oxley Act of 2002, and such registration continues to be effective; 

 



7 

   (b) Bellach, or the registered public accounting firm with which he is 

associated, has been inspected by the PCAOB and that inspection 

did not identify any criticisms of or potential defects in the 

respondent’s or the firm’s quality control system that would 

indicate that Bellach will not receive appropriate supervision; 

   (c) Bellach has resolved all disciplinary issues with the PCAOB, and 

has complied with all terms and conditions of any sanctions 

imposed by the PCAOB (other than reinstatement by the 

Commission); and 

 

   (d) Bellach acknowledges his responsibility, as long as he appears or 

practices before the Commission as an independent accountant, to 

comply with all requirements of the Commission and the PCAOB, 

including, but not limited to, all requirements relating to 

registration, inspections, concurring partner reviews and quality 

control standards.   

 

D. The Commission will consider an application by Bellach to resume appearing or 

practicing before the Commission provided that his state CPA license is current and he has 

resolved all other disciplinary issues with the applicable state boards of accountancy.  However, 

if state licensure is dependent on reinstatement by the Commission, the Commission will 

consider an application on its other merits.  The Commission’s review may include consideration 

of, in addition to the matters referenced above, any other matters relating to Bellach’s character, 

integrity, professional conduct, or qualifications to appear or practice before the Commission as 

an accountant.  Whether an application demonstrates good cause will be considered on a facts 

and circumstances basis with due regard for protecting the integrity of the Commission’s 

processes. 

 

 By the Commission. 

 

 

 

       Vanessa A. Countryman 

       Secretary