UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
Securities Exchange Act of 1934
Release No. 46880 / November 21, 2002
Accounting and Auditing Enforcement
Release No. 1672 / November 21, 2002
File No. 3-10947
In the Matter of
Minas Ioannou, and
| ORDER INSTITUTING ADMINISTRATIVE|
PROCEEDINGS PURSUANT TO RULE
102(e) OF THE COMMISSION'S RULES
OF PRACTICE, MAKING FINDINGS, AND
IMPOSING REMEDIAL SANCTIONS
The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted against BDO International, Minas Ioannou, and Christakis Ioannou (collectively "Respondents") pursuant to Rule 102(e)(3) of the Commission's Rules of Practice.1
In anticipation of the institution of these proceedings, Respondents have submitted Offers of Settlement (the "Offers") which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party, prior to a hearing pursuant to the Commission's Rules of Practice, 17 C.F.R. § 201.1 et seq., and without admitting or denying the findings herein, except as to the Commission's jurisdiction over them, the subject matter of these proceedings, and the findings contained in Section III subsection (3) below, which are admitted, Respondents consent to the entry of this Order Instituting Public Administrative Proceedings Pursuant to Rule 102(e) of the Commission's Rules of Practice, Making Findings, and Imposing Remedial Sanctions ("Order"), as set forth below.
On the basis of this Order and Respondents' Offers, the Commission finds that:
- BDO International was, at all relevant times, a Nicosia, Cyprus accounting firm operating in the form of a partnership. The firm's primary address is 36 Ayias Elenis Street; Galaxias Commercial Center, 4th Floor, Office 403, CY-1061, Nicosia, Cyprus. BDO International is the Cyprus member firm of a separate organization with the same name, BDO International, a worldwide network of professional accountancy and consulting firms.
- Minas Ioannou was, at all relevant times, Managing Partner of BDO International of Nicosia, Cyprus. Christakis Ioannou was, at all relevant times, a certified accountant at BDO International of Nicosia, Cyprus.
- On October 8, 2002, the Commission filed a complaint against Respondents in SEC v. ACLN Ltd., et al. (Civil Action No. 02-CV-7988 S.D.N.Y.). On August 22, 2002, Respondents consented to the entry of a final judgment against them, permanently enjoining them from committing or aiding and abetting violations of Section 17(a) of the Securities Act, Sections 10(b), 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act, and Rules 10b-5, 12b-20, 13a-1 and 13a-16 thereunder. On October 10, 2002, the Court entered an injunction by consent permanently enjoining Respondents from committing or aiding and abetting violations of said provisions of the Securities Act and the Exchange Act.
- The Commission's complaint alleged, among other things, that Minas and Christakis Ioannou were the engagement partner and engagement manager respectively on BDO International's audits of ACLN Ltd. ("ACLN"), that Minas Ioannou signed BDO International's audit reports with respect to ACLN, and that Minas and Christakis Ioannou had no training in or experience applying U.S. Generally Accepted Accounting Principles ("GAAP") or U.S. Generally Accepted Auditing Standards ("GAAS"). The complaint further alleged that BDO International was not independent from its audit client, ACLN Ltd. ("ACLN"), that ACLN's financial statements audited by BDO International were not prepared in conformity with GAAP, and that BDO International's audits of ACLN were not conducted in accordance with GAAS. Further, the complaint alleged that BDO International's audit reports were false and misleading with respect to statements in the reports that BDO International was an independent auditor with respect to ACLN, ACLN's financial statements were prepared in conformity with GAAP, and BDO International's audit was conducted in conformance with GAAS.
In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanction specified in Respondents' Offers.
Accordingly, IT IS HEREBY ORDERED, that:
BDO International of Nicosia, Cyprus, Minas Ioannou, and Christakis Ioannou are suspended from appearing or practicing before the Commission as accountants.
By the Commission.
Jonathan G. Katz
||Rule 102(e)(3)(i) provides, in relevant part, that:|
The Commission, with due regard to the public interest and without preliminary hearing, may, by order, . . . suspend from appearing or practicing before it any . . . accountant . . . who has been by name . . . permanently enjoined by any court of competent jurisdiction, by reason of his or her misconduct in an action brought by the Commission, from violating or aiding and abetting the violation of any provision of the Federal securities laws or of the rules and regulations thereunder.