SEC charges Marcum LLP with quality control failures and audit standard violations in SPAC clients since 2020, resulting in a $10 million penalty.

by Dismal-Jellyfish

Source: www.sec.gov/litigation/admin/2023/34-97773.pdf

TLDRS:

• In 2020/2021 there were 860 SPAC IPOs. Over 400 of these audited by Marcum.
• The SEC has charged audit firm Marcum LLP with significant quality control failures and audit standard violations in audits of hundreds of SPAC clients since 2020.
• This misconduct resulted from Marcum tripling its public company clients, mainly SPACs, thereby revealing pervasive deficiencies in its quality control mechanisms and procedures.
• The firm has agreed to pay a $10 million penalty.
• Marcum’s violations spanned nearly all stages of the audit process and were magnified as more SPAC clients were taken on.
• SEC Chair, Gary Gensler, accused Marcum of prioritizing growth over audit quality, thereby putting its clients and investors at risk.
  • As part of the settlement, Marcum will engage an independent compliance consultant to assess and enhance its audit and quality control policies and procedures, and it will also face restrictions on the type and number of new audit clients it can accept.
• The SEC’s investigation is ongoing.

Source: www.sec.gov/litigation/admin/2023/34-97773.pdf

TLDRS:

• In 2020/2021 there were 860 SPAC IPOs. Over 400 of these audited by Marcum.
• The SEC has charged audit firm Marcum LLP with significant quality control failures and audit standard violations in audits of hundreds of SPAC clients since 2020.
• This misconduct resulted from Marcum tripling its public company clients, mainly SPACs, thereby revealing pervasive deficiencies in its quality control mechanisms and procedures.
• The firm has agreed to pay a $10 million penalty.
• Marcum’s violations spanned nearly all stages of the audit process and were magnified as more SPAC clients were taken on.
• SEC Chair, Gary Gensler, accused Marcum of prioritizing growth over audit quality, thereby putting its clients and investors at risk.
  • As part of the settlement, Marcum will engage an independent compliance consultant to assess and enhance its audit and quality control policies and procedures, and it will also face restrictions on the type and number of new audit clients it can accept.
• The SEC’s investigation is ongoing.

I wonder how many shorts were able to take advantage of these pervasive deficiencies in quality control mechanisms and procedures in the already murky SPAC environment?

I seem to recall corporate media shoving those down the public’s throat around this time or am I misremembering?