Network News

X My Profile
View More Activity
2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

SEC charges Ernst & Young with accounting fraud at Bally fitness

Moments ago, the SEC announced that it has charged Ernst & Young and six of its current and former partners for taking part in accounting fraud with former client Bally Total Fitness, saying E&Y knew or should have known that the gym chain was fudging its accounting.

E&Y will pay $8.5 million to settle the charges, the SEC said. The partners have settled their individual charges, the SEC said.

E&Y said Bally's books were in order from 2001 to 2003; the SEC found otherwise.

"It is deeply disconcerting that partners, even at the highest levels of E&Y, failed to fulfill their basic obligations to the investing public by not conducting proper audits. This case is a sharp reminder to outside auditors that they must carry out their duties with due diligence. The $8.5 million settlement, one of the highest ever paid by an accounting firm, reflects the seriousness of their misconduct," Robert Khuzami, director of the SEC's enforcement division, said in a statement.

It's pretty amazing the SEC is still cleaning up accounting frauds from the early years of this century.

You can read the entire SEC release by clicking here.

-- Frank Ahrens
Sign up to get The Ticker on Twitter

By Frank Ahrens  |  December 17, 2009; 4:44 PM ET
Categories:  The Ticker  | Tags: Bally fitness, E&Y, Ernst & Young, SEC, accounting fraud  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati   Google Buzz   Previous: PepsiCo CEO Indra Nooyi on Jim Cramer tonight at 6
Next: Nov. unemployment essentially unchanged in Washington region

No comments have been posted to this entry.

The comments to this entry are closed.

 
 
RSS Feed
Subscribe to The Post

© 2010 The Washington Post Company