Israel-Based Audit Firm and Partner Suspended for Audit Failures
July 16, 2019
File No. 3-19251
Washington, D.C., July 16, 2019 - The Securities and Exchange Commission today announced that an Israel-based audit firm and its principal agreed to settle charges that they engaged in improper professional conduct while conducting audits and reviews of public issuers.
According to the SEC's order instituting administrative proceedings, certified public accountant and Israeli resident Dov Weinstein and his firm, Dov Weinstein & Co., CPA, engaged in improper professional conduct while auditing and conducting interim reviews for thirteen companies, including four companies that were the products of a fraudulent scheme orchestrated by others to create and market shell companies. Weinstein and his firm allegedly repeatedly violated Public Company Accounting Oversight Board (PCAOB) standards in connection with their audits and interim reviews of those issuers. Specifically, Weinstein and/or his firm failed to conduct engagement quality reviews; exercise due care and professional skepticism; obtain an understanding of certain of the issuers and their environment; implement adequate client-acceptance and continuance procedures; implement procedures designed to identify material related party transactions; maintain independence from their audit clients; and retain certain audit documentation. The Commission previously charged three Israeli residents, a Washington, D.C. attorney, and an Israeli auditor and his Maryland-based accounting firm for their roles in the fraudulent scheme.
The SEC's order finds that Weinstein and his firm engaged in improper professional conduct under Rule 102(e)(1)(ii) of the Commission's Rules of Practice and Section 4(C) of the Securities Exchange Act of 1934. Without admitting or denying the SEC's findings, Weinstein and his firm agreed to the issuance of an order suspending them from appearing or practicing before the SEC as accountants. The SEC's order permits Weinstein and his firm to apply for reinstatement after five years.
The investigation was conducted by Greg Hillson and Jeffrey Anderson and supervised by Peter Rosario, Yuri B. Zelinsky, and Antonia Chion. Daniel Maher is litigation counsel. The SEC appreciates the assistance of the Israel Securities Authority.