In re Berger
summary
Berger, Apple & Associates Ltd. and its engagement partner Mitchell S. Seifert, CPA, willfully violated Section 102(a) of the Sarbanes-Oxley Act by issuing an unregistered audit report for MC Industrial’s 2003 fiscal year, leading to SEC cease-and-desist orders and censure without monetary penalties.
paragraph
Berger, Apple & Associates Ltd. and Mitchell S. Seifert, CPA, were charged by the SEC with willfully violating Section 102(a) of the Sarbanes-Oxley Act by issuing an audit report for MC Industrial Group, Inc.’s 2003 fiscal year while unregistered with the PCAOB, a requirement effective since October 22, 2003. Although no fees were collected for the audit, the SEC found both respondents responsible, with the firm committing the violation and Seifert causing it through his role as engagement partner. As part of a settlement, they consented to cease-and-desist orders, the firm was censured, and both must submit proof of PCAOB registration before resuming practice before the SEC.
narrative
Berger, Apple & Associates Ltd. and its engagement partner, Mitchell S. Seifert, CPA, were charged by the SEC with willfully violating Section 102(a) of the Sarbanes-Oxley Act by issuing an audit report for MC Industrial Group, Inc.’s 2003 fiscal year while unregistered with the Public Company Accounting Oversight Board (PCAOB). The audit report, dated March 8, 2004, was included in MC Industrial’s Form 10-KSB filed with the SEC, despite the firm’s failure to register by the October 22, 2003 statutory deadline. MC Industrial, which reported no revenues or assets for the year, was an issuer under the Act, making PCAOB registration mandatory. Although the firm collected no fees for the audit, the SEC determined that both the firm and Seifert acted willfully, with Seifert as the responsible engagement partner. In a settlement, both respondents consented to cease-and-desist orders without admitting or denying the findings, and the firm was formally censured. Both parties are prohibited from appearing or practicing before the SEC unless they submit documented proof of current PCAOB registration to the Commission’s Office of the Chief Accountant. No monetary penalties were imposed, but the sanctions ensure compliance with federal auditing standards going forward.
Classified accounting-fraud(confidence 100%). EDGAR detection: forms 10-K/10-Q/8-K/NT 10-K· recall 80% / precision 48%. detection rule →
Statutes
SECTIONS 4C AND 21C OF THE SECURITIES EXCHANGE ACTSECTIONS 4C AND 21C OF THE SECURITIES EXCHANGE ACT
Parties
Securities and Exchange CommissionBerger, Apple & Associates Ltd.Mitchell S. Seifert, CPA
Keywords
commissionfirmindustrialsecurities exchangeseifertexchangeaudit reportauditsecuritiesrespondentspublicberger appleapple associatesorderproceedings
Extracted insights
Entities 1
- agency the securities and exchange commission
Triples 7
- The Securities and Exchange Commission deems it appropriate that cease-and-desist proceedings be, and hereby are, instituted against Berger, Apple & Associates Ltd. and Mitchell S. Seifert, CPA
- The Securities and Exchange Commission has determined to accept Respondents' Offer of Settlement
- 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
- The Commission may censure a person or deny, temporarily or permanently, the privilege of appearing or practicing before it in any way to any person
- Respondents consent 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
- The Commission finds that: A. RESPONDENTS 1. Berger, Apple & Associates Ltd. (the “Firm”) is an Ohio limited liability company and public accounting firm based in Beachwood, Ohio. The Firm audited MC Industrial Group, Inc.’s (“MC Industrial”) financial statements for the company’s 2003 fiscal year ended December 31, 2003.
- Mitchell S. Seifert, CPA was the engagement partner in connection with the Firm’s audit of MC Industrial for the company’s 2003 fiscal year ended December 31, 2003.
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Extracted body text (9,231c)
UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 56400 / September 13, 2007
ACCOUNTING AND AUDITING ENFORCEMENT
Release No. 2680 / September 13, 2007
ADMINISTRATIVE PROCEEDING
File No. 3-12761
In the Matter of
Berger, Apple & Associates Ltd. and
Mitchell S. Seifert, CPA,
Respondents.
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
I.
The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-
and-desist proceedings be, and hereby are, instituted against Berger, Apple & Associates Ltd. and
Mitchell S. Seifert, CPA (collectively “Respondents”) pursuant to Section 21C of the Securities
Exchange Act of 1934 (“Exchange Act”), and that public administrative proceedings be, and
hereby are, instituted against Berger, Apple & Associates Ltd. pursuant to Section 4C
1
of the
Exchange Act and Rule 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 . . .
to have willfully violated, or willfully aided and abetted the violation of, any provision of the
securities laws or the rules and regulations thereunder.
2
Rule 102(e)(1)(iii) provides, in relevant part, that:
The Commission may censure a person or deny, temporarily or permanently, the privilege of
appearing or practicing before it in any way 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.
II.
In anticipation of the institution of these proceedings, Respondents have submitted an Offer
of Settlement (“Offer”), which 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 them and the subject matter of these proceedings, which are
admitted, Respondents consent 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 Respondents’ Offer, the Commission finds
3
that:
A. RESPONDENTS
1. Berger, Apple & Associates Ltd. (the “Firm”) is an Ohio limited liability
company and public accounting firm based in Beachwood, Ohio. The Firm audited MC Industrial
Group, Inc.’s (“MC Industrial”) financial statements for the company’s 2003 fiscal year ended
December 31, 2003.
2. Mitchell S. Seifert, CPA, (“Seifert”), 43, of Solon, Ohio, is a certified public
accountant licensed in the state of Ohio since 1997. Seifert was the engagement partner in
connection with the Firm’s audit of MC Industrial for the company’s 2003 fiscal year ended
December 31, 2003.
B. FACTS
1. MC Industrial (known as New Jersey Acquisition, Inc. during the relevant time
period) is a Delaware corporation with its headquarters in Lakewood, New Jersey. MC Industrial’s
common stock is registered pursuant to Section 12(g) of the Exchange Act and does not currently
trade on any market. For its fiscal year ended December 31, 2003, MC Industrial reported no
revenues and no assets.
2. MC Industrial has at all relevant times been an issuer as defined by the Sarbanes-
Oxley Act of 2002 (the “Act”).
3. The Firm audited MC Industrial’s 2003 financial statements included in MC
Industrial’s annual report for fiscal year 2003 on Form 10-KSB, filed with the Commission on
March 12, 2004. As part of that audit, the Firm prepared and issued an audit report dated March 8,
2004 (the “MC Industrial audit report”), which the company included in its 2003 Form 10-KSB.
The Firm did not collect any fees for the audit work.
The findings herein are made pursuant to Respondents’ Offer of Settlement and are not binding on any
other person or entity in this or any other proceeding.
2
3
4. At the time the Firm issued the MC Industrial audit report, it was not registered
with the Public Company Accounting Oversight Board (the “Board”), as required by Section
102(a) of the Act.
5. Seifert was the engagement partner on the Firm’s audit of MC Industrial’s 2003
financial statements. Seifert participated in the preparation and issuance of the MC Industrial audit
report.
C. VIOLATIONS
1. Section 102(a) of the Act provides that “it shall be unlawful for any person that is
not a registered public accounting firm to prepare or issue, or to participate in the preparation or
issuance of, any audit report with respect to any issuer.”
4
2. The provisions of Section 102(a) of the Act became effective on October 22, 2003.
5
3. Based on the conduct described above, the Firm willfully
6
violated Section 102(a)
of the Act.
4. Based on the conduct described above, Seifert caused the Firm’s violation of
Section 102(a) of the Act.
D. FINDINGS
Based on the foregoing, the Commission finds that the Firm willfully violated Section
102(a) of the Sarbanes-Oxley Act of 2002, and that Seifert caused the Firm’s violation of Section
102(a) of the Act.
E. UNDERTAKING
Respondents have undertaken not to request, demand, or accept, directly or indirectly, any
compensation from MC Industrial in connection with the audit work associated with the MC
Industrial audit report. In determining whether to accept the Offer, the Commission has considered
this undertaking.
4
A violation of the Act or any rule that the Board issues under the Act is treated for all purposes in the same
manner as a violation of the Exchange Act, including with respect to penalties. Sarbanes-Oxley Act of 2002, 15
U.S.C.A. § 7202(b)(1) (West 2002).
5
Section 102(a) became effective “[b]eginning 180 days after the date of the determination of the
Commission under Section 101(d)” of the Act that the Board was prepared to undertake its statutory responsibilities.
The Commission made the required determination on April 25, 2003. See
Order Regarding Section 101(d) of the
Sarbanes-Oxley Act of 2002, Securities Act Release No. 8223, Exchange Act Release No. 47746, 2003 WL
1956164 (Apr. 25, 2003).
6
“Willfully” as used in this Order means intentionally committing the act that constitutes the violation.
There is no requirement that the actor also be aware that he is violating a rule or statute. See Wonsover v. SEC, 205
F.3d 408, 414 (D.C. Cir. 2000); Tager v. SEC, 344 F.2d 5, 8 (2d Cir. 1965).
3
IV.
In view of the foregoing, the Commission deems it appropriate to impose the sanctions
agreed to in Respondents’ Offer.
Accordingly, it is hereby ORDERED, effective immediately, that:
1. Berger, Apple & Associates Ltd.
A. The Firm shall cease and desist from committing or causing any violations
and any future violations of Section 102(a) of the Act.
B. The Firm is censured.
C. The Firm may practice before the Commission as an independent accountant
provided that:
1. It is registered with the Board in accordance with the Act, and such
registration continues to be effective; and
2. It has submitted to the Commission staff (attention: Office of the
Chief Accountant) the Board’s letter notifying the Firm that its registration application has been
approved.
2. Mitchell S. Seifert, CPA
A. Seifert shall cease and desist from committing or causing any violations and
any future violations of Section 102(a) of the Act.
B. Seifert may practice before the Commission as an independent accountant
provided that:
1. The public accounting firm with which he is associated is registered
with the Board in accordance with the Act, and such registration continues to be effective; and
2. He has submitted to the Commission staff (attention: Office of the
Chief Accountant) the Board’s letter notifying the public accounting firm with which he is
associated that its registration application has been approved.
By the Commission.
Nancy M. Morris
Secretary
4
OCR text (8,728c · tika · 95% conf)
UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 56400 / September 13, 2007
ACCOUNTING AND AUDITING ENFORCEMENT
Release No. 2680 / September 13, 2007
ADMINISTRATIVE PROCEEDING
File No. 3-12761
In the Matter of
Berger, Apple & Associates Ltd. and
Mitchell S. Seifert, CPA,
Respondents.
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
I.
The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-
and-desist proceedings be, and hereby are, instituted against Berger, Apple & Associates Ltd. and
Mitchell S. Seifert, CPA (collectively “Respondents”) pursuant to Section 21C of the Securities
Exchange Act of 1934 (“Exchange Act”), and that public administrative proceedings be, and
hereby are, instituted against Berger, Apple & Associates Ltd. pursuant to Section 4C1 of the
Exchange Act and Rule 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 . . .
to have willfully violated, or willfully aided and abetted the violation of, any provision of the
securities laws or the rules and regulations thereunder.
2 Rule 102(e)(1)(iii) provides, in relevant part, that:
The Commission may censure a person or deny, temporarily or permanently, the privilege of
appearing or practicing before it in any way 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.
II.
In anticipation of the institution of these proceedings, Respondents have submitted an Offer
of Settlement (“Offer”), which 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 them and the subject matter of these proceedings, which are
admitted, Respondents consent 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 Respondents’ Offer, the Commission finds3 that:
A. RESPONDENTS
1. Berger, Apple & Associates Ltd. (the “Firm”) is an Ohio limited liability
company and public accounting firm based in Beachwood, Ohio. The Firm audited MC Industrial
Group, Inc.’s (“MC Industrial”) financial statements for the company’s 2003 fiscal year ended
December 31, 2003.
2. Mitchell S. Seifert, CPA, (“Seifert”), 43, of Solon, Ohio, is a certified public
accountant licensed in the state of Ohio since 1997. Seifert was the engagement partner in
connection with the Firm’s audit of MC Industrial for the company’s 2003 fiscal year ended
December 31, 2003.
B. FACTS
1. MC Industrial (known as New Jersey Acquisition, Inc. during the relevant time
period) is a Delaware corporation with its headquarters in Lakewood, New Jersey. MC Industrial’s
common stock is registered pursuant to Section 12(g) of the Exchange Act and does not currently
trade on any market. For its fiscal year ended December 31, 2003, MC Industrial reported no
revenues and no assets.
2. MC Industrial has at all relevant times been an issuer as defined by the Sarbanes-
Oxley Act of 2002 (the “Act”).
3. The Firm audited MC Industrial’s 2003 financial statements included in MC
Industrial’s annual report for fiscal year 2003 on Form 10-KSB, filed with the Commission on
March 12, 2004. As part of that audit, the Firm prepared and issued an audit report dated March 8,
2004 (the “MC Industrial audit report”), which the company included in its 2003 Form 10-KSB.
The Firm did not collect any fees for the audit work.
The findings herein are made pursuant to Respondents’ Offer of Settlement and are not binding on any
other person or entity in this or any other proceeding.
2
3
4. At the time the Firm issued the MC Industrial audit report, it was not registered
with the Public Company Accounting Oversight Board (the “Board”), as required by Section
102(a) of the Act.
5. Seifert was the engagement partner on the Firm’s audit of MC Industrial’s 2003
financial statements. Seifert participated in the preparation and issuance of the MC Industrial audit
report.
C. VIOLATIONS
1. Section 102(a) of the Act provides that “it shall be unlawful for any person that is
not a registered public accounting firm to prepare or issue, or to participate in the preparation or
issuance of, any audit report with respect to any issuer.”4
2. The provisions of Section 102(a) of the Act became effective on October 22, 2003.5
3. Based on the conduct described above, the Firm willfully6 violated Section 102(a)
of the Act.
4. Based on the conduct described above, Seifert caused the Firm’s violation of
Section 102(a) of the Act.
D. FINDINGS
Based on the foregoing, the Commission finds that the Firm willfully violated Section
102(a) of the Sarbanes-Oxley Act of 2002, and that Seifert caused the Firm’s violation of Section
102(a) of the Act.
E. UNDERTAKING
Respondents have undertaken not to request, demand, or accept, directly or indirectly, any
compensation from MC Industrial in connection with the audit work associated with the MC
Industrial audit report. In determining whether to accept the Offer, the Commission has considered
this undertaking.
4 A violation of the Act or any rule that the Board issues under the Act is treated for all purposes in the same
manner as a violation of the Exchange Act, including with respect to penalties. Sarbanes-Oxley Act of 2002, 15
U.S.C.A. § 7202(b)(1) (West 2002).
5 Section 102(a) became effective “[b]eginning 180 days after the date of the determination of the
Commission under Section 101(d)” of the Act that the Board was prepared to undertake its statutory responsibilities.
The Commission made the required determination on April 25, 2003. See Order Regarding Section 101(d) of the
Sarbanes-Oxley Act of 2002, Securities Act Release No. 8223, Exchange Act Release No. 47746, 2003 WL
1956164 (Apr. 25, 2003).
6 “Willfully” as used in this Order means intentionally committing the act that constitutes the violation.
There is no requirement that the actor also be aware that he is violating a rule or statute. See Wonsover v. SEC, 205
F.3d 408, 414 (D.C. Cir. 2000); Tager v. SEC, 344 F.2d 5, 8 (2d Cir. 1965).
3
IV.
In view of the foregoing, the Commission deems it appropriate to impose the sanctions
agreed to in Respondents’ Offer.
Accordingly, it is hereby ORDERED, effective immediately, that:
1. Berger, Apple & Associates Ltd.
A. The Firm shall cease and desist from committing or causing any violations
and any future violations of Section 102(a) of the Act.
B. The Firm is censured.
C. The Firm may practice before the Commission as an independent accountant
provided that:
1. It is registered with the Board in accordance with the Act, and such
registration continues to be effective; and
2. It has submitted to the Commission staff (attention: Office of the
Chief Accountant) the Board’s letter notifying the Firm that its registration application has been
approved.
2. Mitchell S. Seifert, CPA
A. Seifert shall cease and desist from committing or causing any violations and
any future violations of Section 102(a) of the Act.
B. Seifert may practice before the Commission as an independent accountant
provided that:
1. The public accounting firm with which he is associated is registered
with the Board in accordance with the Act, and such registration continues to be effective; and
2. He has submitted to the Commission staff (attention: Office of the
Chief Accountant) the Board’s letter notifying the public accounting firm with which he is
associated that its registration application has been approved.
By the Commission.
Nancy M. Morris
Secretary
4