ADMINISTRATIVE PROCEEDING
FILE NO. 3-20600

September 27, 2021 - The Securities and Exchange Commission today instituted settled administrated proceedings against Ravindranathan Raghunathan, a New Jersey-based certified public accountant who served as the engagement partner for the audit of Longfin Corp.'s 2017 financial statements, and Craig A. Golding, a California-based CPA who served as the engagement quality review partner, for their failure to comply with PCAOB standards in the course of the Longfin audit. Today's action represents the third set of actions following Longfin's IPO in December 2017. In April 2018, the SEC filed an emergency action against Longfin, its CEO, and three other parties, and obtained a preliminary injunction freezing approximately $27 million of allegedly illegal trading proceeds. In its subsequent amended complaint filed in June 2019, the SEC alleged that Longfin and its CEO perpetuated an accounting fraud by reporting fictitious revenue from round-trip commodity transactions between Longfin and related parties controlled by the company's CEO.

The SEC's order finds that Raghunathan, a partner of the audit firm that issued an unqualified opinion on Longfin's 2017 financial statements, failed to adhere to numerous PCAOB standards, resulting in audit failures in three critical audit areas, including revenue recognition and related party transactions. The order also finds that Golding, also a partner of the audit firm, did not adequately conduct his review of two of those three areas in accordance with the applicable PCAOB standard. According to the order, the audit work papers identified related party transactions as a "significant high-risk area" and a "complex or troublesome engagement area." Despite these risks, Raghunathan failed to exercise appropriate due professional care and skepticism and implement appropriate audit responses to those risks. The order also finds that Golding did not sufficiently recognize that the related party audit procedures did not sufficiently address the identified risk of fraud or that significant and unusual related party transactions were not agreed to supporting documents.

Based on the foregoing conduct, the SEC's order finds that Raghunathan and Golding each engaged in improper professional conduct within the meaning of Section 4C(a)(2) of the Securities Exchange Act of 1934 and Rule 102(e)(1)(ii) of the SEC's Rules of Practice and that they each were a cause of the audit firm's violations of Rule 2-02(b)(1) of Regulation S-X and of Longfin's violations of Section 13(a) of the Exchange Act and Rule 13a-1 thereunder. Without admitting or denying the SEC's findings, Raghunathan agreed to pay a civil penalty of $25,000 and be denied the privilege of appearing or practicing before the SEC as an accountant with a right to reapply after three years. Also without admitting or denying the SEC's findings, Golding agreed to pay a civil penalty of $10,000 and be denied the privilege of appearing or practicing before the SEC as an accountant with a right to reapply after one year. Raghunathan and Golding each also agreed to cease and desist orders.

The SEC's investigation, which is continuing, was led by Eric Hubbs and Ernesto Amparo under the supervision of D. Mark Cave and Anita B. Bandy.