DD Support Board and Research Team

[1manband]

SEC bars CPA and his firm for shell scheme

https://www.sec.gov/litigation/admin/2018/34-82744.pdf

The Securities and Exchange Commission (“Commission”) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted against Alan Weinberg (“Weinberg”) and Weinberg & Baer LLC (“W&B”) (“Respondents”) pursuant to Rule 102(e)(3)(i) of the Commission’s Rules of Practice.

The Commission’s complaint alleges, among other things, that between 2011 and 2014, Weinberg and W&B aided and abetted a scheme to prepare seven fraudulent shell companies (the “Issuers”) to issue shares to the public and then to sell the shell companies in reverse mergers or other changes in control. The complaint alleges that Weinberg served as the engagement partner for audits of the Issuers’ financial statements, and that Weinberg knew, or was reckless in not knowing, that certain undisclosed persons, not the Issuers’ purported officers and directors, exercised control over the Issuers. The complaint further alleges that in violation of professional standards, Weinberg and W&B failed to implement reasonable client-acceptance and continuance procedures and demonstrated virtually no professional skepticism regarding the undisclosed control persons’ relationship with the Issuers, and neither questioned their role with regard to the Issuers, nor took reasonable steps to investigate whether the purported directors and officers actually served in those capacities. The complaint also alleges that Weinberg and W&B failed to (a) properly audit related-party transactions between the undisclosed control persons and the Issuers, and (b) maintain sufficient work paper documentation of their audits of the Issuers. The complaint alleges that despite these repeated failures to adhere to PCAOB standards, W&B recklessly and falsely claimed in each of its audit reports for the Issuers that W&B had complied with PCAOB standards.

Accordingly, it is hereby ORDERED, effective immediately, that Respondents are suspended from appearing or practicing before the Commission as accountants.