ADMINISTRATIVE PROCEEDING
File No. 3-20395

July 13, 2021 - The Securities and Exchange Commission today instituted administrative proceedings against Stockman, Kast, Ryan, & Co. LLP. (SKR), an audit firm based in Colorado Springs, Colorado, and two audit partners, Ellen Fisher, CPA, and David Kast, CPA, to determine whether SKR, Fisher, and Kast engaged in improper professional conduct in connection with audits of private funds advised by an SEC-registered investment adviser.

As described in the order, the SEC's Division of Enforcement and Office of the Chief Accountant (OCA) allege that Fisher, the audit engagement partner, and SKR failed to obtain sufficient appropriate audit evidence regarding the valuation and existence of certain hard to value assets held by the private funds.  The allegations state that Fisher and SKR failed to meet applicable auditing standards related to audit planning, evaluating audit results, audit documentation, and supervision and review, and that Kast, as the engagement quality review partner, reviewed and approved work papers that failed to obtain sufficient appropriate audit evidence regarding the valuation and existence of assets.  The allegations further state that SKR was not independent because an SKR partner served as trustee or general partner for trusts that invested in funds audited by SKR.

The Enforcement Division and OCA allege that SKR, Fisher, and Kast 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 Commission's Rules of Practice, and caused the investment adviser to violate Section 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-2.  This matter will be scheduled for a public hearing before the Commission, which will issue a decision stating whether the Enforcement Division and OCA have proven the allegations in the order and what, if any, remedial actions are appropriate.

The SEC's investigation was conducted by Michael D'Angelo and Jacqueline Moessner, with assistance from Willa Fuller, of the Denver Regional Office.  The case was supervised by Mary Brady.  The litigation will be led by Terry R. Miller and supervised by Gregory Kasper.