Ex-Bank Exec Settles SEC Suit

An auditor has a tougher job than many people would often think. Much of the information that is processed through an auditor is not easily found. Although it may seem that an auditor's most valuable asset is technology, many would argue that it is the information finished by the employees that is the most valuable. This is why the SEC comes down very harshly when employees give false or misleading information to auditors.

When an auditor goes to a company to perform an audit, they are strangers to the personnel and often times are given only information in which they ask for, but not all the information they need. It is this reason why it is very important that when an employee gives an auditor information, it can be relied upon and used as a reference, because most of the time, the information that is not in the computer is the most crucial.

It is these reasons, referenced above, that the SEC nailed down on San Fransisco-based United Commercial Bank ex-executive John Cinderey. During the financial crisis of 2008, Cinderey allegedly altered memorandum that independent auditors needed. The SEC also accuses Cinderey of delaying the audit and changing policies that caused the audit team to determine the Bank, and its subsidiaries, in an inaccurate light. In Cinderey's defense, he states that he was acting on behalf of his superiors, although this gives him no right to do what he did.

In a settlement, in which Cinderey neither confirms nor denies the allegations, he is permanently banned from any types of bookkeeping. However, he will not be forced to pay a fine or penalty due to the $40,000 penalty he paid in a civil action against him from the FDIC. The courts ruled that this fine is sufficient for the alleged violates he is accused of. The reason he was let off so easily is that he is has assisted the SEC heavily in a similar case and has given personal insight on the related enforcement.

Cinderey is not the only executive from United Commercial Bank or its subsidiaries, that has been accused of securities fraud and misleading auditors. Chief executive officer Thomas Wu, chief operating officer Ebrahim Shabudin, and senior officer Thomas Yu were all accused of such allegations of hiding assets and misleading auditors. This gives a bad reputation to UCB, but shows how important accurate and reliable data can be. With the ever increasing revolutions in technology, it can become even easier to get side tracked, or to be lead astray due to unfamiliar territory, however auditors are faced with this situation with every audit they complete. This is why the consequences of misleading, hiding, or lying to auditors, is severely punishable.

Source: http://inaudit.com/regulatory/sec/ex-bank-exec-settles-sec-suit-16637/;
http://www.sec.gov/news/press/2011/2011-202.htm