SEC Press pdf 250 KB 10,661 chars

In re Henry Schiffer

Exhibit of Press Release: SEC Charges 69 Audit Firms and Partners for Issuing Audit Reports While Not Registered with the PCAOB (Press Release No. 2007-183; September 13, 2007)

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summary

Henry Schiffer, CPA, and his firm willfully violated Section 102(a) of the Sarbanes-Oxley Act by issuing an unregistered audit report for USCorp’s 2003 fiscal year, leading to SEC-imposed cease-and-desist orders, censure, and a bar from PCAOB registration until February 2005, after voluntarily reimbursing the $2,500 audit fee.

paragraph

Henry Schiffer, CPA, and his accountancy corporation issued an audit report for USCorp’s 2003 fiscal year without being registered with the PCAOB, in violation of Section 102(a) of the Sarbanes-Oxley Act, which took effect on October 22, 2003. As the engagement partner, Schiffer knowingly participated in the unauthorized audit, for which the firm received $2,500 in fees—later voluntarily reimbursed, eliminating the need for disgorgement. The SEC imposed cease-and-desist orders against both respondents, censured the firm, and barred them from PCAOB registration until February 15, 2005, while requiring future compliance with registration and reporting obligations.

narrative

Henry Schiffer, CPA, and his California-based accountancy corporation, Henry Schiffer, CPA, An Accountancy Corporation, issued an audit report for USCorp’s 2003 fiscal year on December 15, 2003, despite not being registered with the Public Company Accounting Oversight Board (PCAOB), a legal requirement under Section 102(a) of the Sarbanes-Oxley Act effective since October 22, 2003. Schiffer, as the engagement partner, actively participated in preparing and issuing the report, which was included in USCorp’s Form 10-KSB filed with the SEC. The firm received $2,500 in audit fees for this work, but voluntarily reimbursed the amount prior to the SEC’s order, which led the Commission to decline seeking disgorgement. The PCAOB had previously disapproved the firm’s registration application in October 2004 due to this violation, effectively barring it from registration until February 15, 2005. The SEC instituted cease-and-desist proceedings against both Schiffer and the firm, and imposed administrative censure on the firm under Rule 102(e). Both respondents consented to the order without admitting or denying the findings, except as to jurisdiction. The SEC required that neither party appear or practice before the Commission unless they are properly registered with the PCAOB and comply with all applicable reporting obligations going forward.

Enriched metadata

Scheme: accounting-fraud (100%)
Outcome: settled

Classified accounting-fraud(confidence 100%). EDGAR detection: forms 10-K/10-Q/8-K/NT 10-K· recall 80% / precision 48%. detection rule →

Extracted insights

Dollar amounts 2

$2.50M $2.5 million $1M–$10M
$3K $2,500 <$10K

Entities 3

person henry schiffer
company henry schiffer, cpa, an accountancy corporation
agency Securities and Exchange Commission

Triples 9

SEC instituted proceedings against Henry Schiffer, CPA, An Accountancy Corporation and Henry Schiffer, CPA
Henry Schiffer, CPA, An Accountancy Corporation is based in Beverly Hills, California
Henry Schiffer, CPA, An Accountancy Corporation audited financial statements for USCorp for fiscal year ended September 30, 2003
USCorp dismissed Henry Schiffer, CPA, An Accountancy Corporation as independent auditor on March 19, 2004
Henry Schiffer is licensed as CPA in California since 1966
Henry Schiffer was engagement partner for USCorp audit for fiscal year ended September 30, 2003
Henry Schiffer is resident of Los Angeles, California
USCorp is based in Las Vegas, Nevada
SEC accepted Offer of Settlement from Respondents

PDF

In re Henry Schiffer · Source

Text layers

Extracted body text (10,661c)

UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934
Release No. 56414 / September 13, 2007
ACCOUNTING AND AUDITING ENFORCEMENT
Release No. 2694 / September 13, 2007
ADMINISTRATIVE PROCEEDING
File No. 3-12775
In the Matter of
Henry Schiffer, CPA, An
Accountancy Corporation and
Henry Schiffer, 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 Henry Schiffer, CPA, An Accountancy
Corporation and Henry Schiffer, 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 Henry Schiffer, CPA, An Accountancy Corporation 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

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. Henry Schiffer, CPA, An Accountancy Corporation (the “Firm”) is a California
corporation based in Beverly Hills, California. The Firm audited USCorp’s financial statements
for the company’s 2003 fiscal year ended September 30, 2003. USCorp dismissed the Firm as its
independent auditor on March 19, 2004.
2. Henry Schiffer, CPA (“Schiffer”), age 65, a resident of Los Angeles, California, is a
certified public accountant licensed in the state of California since 1966. Schiffer was the
engagement partner in connection with the Firm’s audit of USCorp’s financial statements for the
company’s 2003 fiscal year ended September 30, 2003.
B. FACTS
1. USCorp is a Nevada corporation based in Las Vegas, Nevada. USCorp’s common
stock is registered with the Commission pursuant to Section 12(g) of the Exchange Act and trades
on the OTC Bulletin Board under the symbol USCS.OB. For its fiscal year ended September 30,
2003, USCorp reported no revenue and total assets of $2.5 million.
2. USCorp has at all relevant times been an issuer as defined by the Sarbanes-Oxley
Act of 2002 (the “Act”).
3. The Firm audited USCorp’s 2003 financial statements included in the company’s
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.
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

annual report for fiscal year 2003 on Form 10-KSB, filed with the Commission on December 24,
2003. As part of the audit, the Firm prepared and issued an audit report dated December 15, 2003
(the “USCorp audit report”) which the company included in its 2003 Form 10-KSB. USCorp paid
the Firm $2,500 for the audit work.
4
4. At the time the Firm issued the USCorp 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. Schiffer was the engagement partner on the Firm’s audit of USCorp’s 2003
financial statements. Schiffer participated in the preparation and issuance of the USCorp audit
report.
6. By order dated October 14, 2004, the Board disapproved an application for
registration submitted by the Firm based in part on the Firm’s violation of Section 102(a) of the
Act in issuing the USCorp audit report.
5
The order effectively prevented the Firm from becoming
registered with the Board until after February 15, 2005, approximately one year from the date the
Board issued a notice of hearing on the Firm’s application.
6
Schiffer has only worked as an
accountant through the Firm since before the Board’s order and has not otherwise been associated
with a public accounting firm registered with the Board.
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.”
7
4
During the course of the Commission’s investigation, the Firm voluntarily reimbursed
USCorp the $2,500 in audit fees. In view of the Firm’s reimbursement, the Commission is not
ordering disgorgement in this matter.
5
PCAOB Release No. 2004-010 (October 14, 2004). The order also found that the Firm’s
issuance of the USCorp audit report violated Board Rule 2100, which implemented Section 102(a)
of the Act. Id.
6
The order states that with respect to any new registration application the Firm submits
after February 15, 2005, the Board will not issue a notice of hearing to determine whether to
approve or disapprove such application based solely on the violations subject to the Board’s
order. Id.
7
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).
3

2. The provisions of Section 102(a) of the Act became effective on October 22, 2003.
8
3. Based on the conduct described above, the Firm willfully
9
violated Section 102(a)
of the Act.
4. Based on the conduct described above, Schiffer 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 Schiffer caused the Firm’s violation of Section
102(a) of the Act.
E. UNDERTAKING
Respondents undertake not to request, demand, or accept, directly or indirectly, any
compensation from USCorp in connection with the audit work associated with the USCorp audit
report. In determining whether to accept the Offer, the Commission has considered this
undertaking.
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. Henry Schiffer, CPA, An Accountancy Corporation
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.
8
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).
9
“Willfully” as used in this Offer 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).
4

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. Henry Schiffer, CPA
A. Schiffer shall cease and desist from committing or causing any violations
and any future violations of Section 102(a) of the Act.
B. Schiffer 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
5

OCR text (10,113c · tika · 95% conf)

UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934
Release No. 56414 / September 13, 2007

ACCOUNTING AND AUDITING ENFORCEMENT
Release No. 2694 / September 13, 2007

ADMINISTRATIVE PROCEEDING
File No. 3-12775

In the Matter of

Henry Schiffer, CPA, An
Accountancy Corporation and

Henry Schiffer, 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

The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-
and-desist proceedings be, and hereby are, instituted against Henry Schiffer, CPA, An Accountancy
Corporation and Henry Schiffer, 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 Henry Schiffer, CPA, An Accountancy Corporation 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

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. Henry Schiffer, CPA, An Accountancy Corporation (the “Firm”) is a California
corporation based in Beverly Hills, California. The Firm audited USCorp’s financial statements
for the company’s 2003 fiscal year ended September 30, 2003. USCorp dismissed the Firm as its
independent auditor on March 19, 2004.

2. Henry Schiffer, CPA (“Schiffer”), age 65, a resident of Los Angeles, California, is a
certified public accountant licensed in the state of California since 1966. Schiffer was the
engagement partner in connection with the Firm’s audit of USCorp’s financial statements for the
company’s 2003 fiscal year ended September 30, 2003.

B. FACTS

1. USCorp is a Nevada corporation based in Las Vegas, Nevada. USCorp’s common
stock is registered with the Commission pursuant to Section 12(g) of the Exchange Act and trades
on the OTC Bulletin Board under the symbol USCS.OB. For its fiscal year ended September 30,
2003, USCorp reported no revenue and total assets of $2.5 million.

2. USCorp has at all relevant times been an issuer as defined by the Sarbanes-Oxley
Act of 2002 (the “Act”).

3. The Firm audited USCorp’s 2003 financial statements included in the company’s

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.

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.

http:USCS.OB

4. At the time the Firm issued the USCorp 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. Schiffer was the engagement partner on the Firm’s audit of USCorp’s 2003
financial statements. Schiffer participated in the preparation and issuance of the USCorp audit
report.

6. By order dated October 14, 2004, the Board disapproved an application for
registration submitted by the Firm based in part on the Firm’s violation of Section 102(a) of the
Act in issuing the USCorp audit report.5 The order effectively prevented the Firm from becoming
registered with the Board until after February 15, 2005, approximately one year from the date the
Board issued a notice of hearing on the Firm’s application.6 Schiffer has only worked as an
accountant through the Firm since before the Board’s order and has not otherwise been associated
with a public accounting firm registered with the Board.

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.”7

4 During the course of the Commission’s investigation, the Firm voluntarily reimbursed
USCorp the $2,500 in audit fees. In view of the Firm’s reimbursement, the Commission is not
ordering disgorgement in this matter.

5 PCAOB Release No. 2004-010 (October 14, 2004). The order also found that the Firm’s
issuance of the USCorp audit report violated Board Rule 2100, which implemented Section 102(a)
of the Act. Id.

6 The order states that with respect to any new registration application the Firm submits
after February 15, 2005, the Board will not issue a notice of hearing to determine whether to
approve or disapprove such application based solely on the violations subject to the Board’s
order. Id.

7 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).

2. The provisions of Section 102(a) of the Act became effective on October 22, 2003.8

3. Based on the conduct described above, the Firm willfully9 violated Section 102(a)
of the Act.

4. Based on the conduct described above, Schiffer 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 Schiffer caused the Firm’s violation of Section
102(a) of the Act.

E. UNDERTAKING

Respondents undertake not to request, demand, or accept, directly or indirectly, any
compensation from USCorp in connection with the audit work associated with the USCorp audit
report. In determining whether to accept the Offer, the Commission has considered this
undertaking.

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. Henry Schiffer, CPA, An Accountancy Corporation

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.

8 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).

9 “Willfully” as used in this Offer 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).

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. Henry Schiffer, CPA

A. Schiffer shall cease and desist from committing or causing any violations
and any future violations of Section 102(a) of the Act.

B. Schiffer 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