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SEC Sues Big 4 Accountants

WASHINGTON (CN) - The SEC on Monday accused five of the biggest accounting firms in the world of refusing to produce documents on Chinese companies the SEC is investigating for fraud against U.S. investors.

The SEC charged these accounting firms with Sarbanes-Oxley violations:

BDO China Dahua Co. Ltd;

Deloitte Touche Tohmatsu Certified Public Accountants Ltd.;

Ernst & Young Hua Ming LLP;

KPMG Huazhen (Special General Partnership);

and PricewaterhouseCoopers Zhong Tian CPAs Limited.

The Sarbanes-Oxley Act requires foreign public accounting firms to provide the SEC upon request with audit work papers involving any company trading on U.S. markets, the SEC said in a statement announcing its Order Instituting Administrative Proceedings.

The SEC said it is investigating nine Chinese companies whose securities are publicly traded in the United States, and the defendants have refused to cooperate.

SEC Enforcement Division Director Robert Khuzami said in the statement that the auditors "face serious sanctions."


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