Law and Regulations

US SEC has accounting probes in the works, White says

Securities and Exchange Commission Chairwoman Mary Jo White.
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A task force formed last year to police for accounting fraud has launched a series of new investigations, the top U.S. securities regulator will tell lawmakers on Tuesday.

"A number of new investigations and inquiries are under way, including matters focused on both traditional and emerging financial fraud issues," said Securities and Exchange Commission Chair Mary Jo White in prepared congressional testimony before the U.S. House Financial Services Committee.

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White did not elaborate on what the SEC has been finding, or what defines "emerging financial fraud."

But throughout her tenure so far, the former federal prosecutor has been working to refocus the SEC Enforcement Division's back onto accounting issuesan area that has featured less prominently on the SEC's docket of cases over the past few years as regulators turned their attention to insider-trading by hedge funds and financial crisis-era frauds.

Sec. Lew: China needs to be more transparent

Part of that renewed focus has centered on an increasing use of specialized technology that can scan public filings for potential accounting abuses.

In addition, last July the SEC unveiled its new financial reporting and audit task force, which is headed by David Woodcock, an attorney and accountant who heads the SEC's Fort Worth, Texas, office.

The task force has been involved in scrutinizing financial restatements and revisions, among other areas.

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Separately, the SEC has also recently ramped up its focus against gatekeepers such as auditors and even public company audit committee members.

In March, the SEC took the unusual step of filing civil charges against the former audit committee chairman of the animal feed company AgFeed Industries for his alleged role in failing to properly investigate an elaborate accounting fraud orchestrated in China.

The ex-audit committee chairman has denied the charges, and plans to litigate the case in court.

—By Reuters