SEC Obtains Final Judgment Against, and Suspends, Accountant Formerly with Construction Management Consulting Company
Litigation Release No. 24939 / October 5, 2020
Accounting and Auditing Enforcement Release No. 4185 / October 5, 2020
Securities and Exchange Commission v. Hill International, Inc. et al., No. 1:20-cv-02143 (E.D. Pa. filed January 16, 2020)
On October 1, 2020, the U.S. District Court for the Eastern District of Pennsylvania entered a final consent judgment against Nicholas Tornello, a former senior accountant at Hill International, Inc.
The SEC's complaint, filed on January 16, 2020, alleged that Tornello failed to correct approximately $5 million in accounting errors relating to foreign currency exchange losses incurred by Hill, and attempted to "bleed" those losses out over time. As alleged, this conduct reduced the negative impact of the losses, resulting in overstated net income on the company's financial statements.
Without admitting or denying the SEC's allegations, Tornello consented to the entry of the final judgment, which enjoins him from violating the record-keeping and internal controls provisions of Section 13(b)(5) of the Securities and Exchange Act of 1934 and Rule 13b2-1 thereunder, and from aiding and abetting violations of the books and records and reporting provisions of 13(a) and13(b)(2)(A) of the Exchange Act and Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder. The judgment also orders Tornello to pay a $25,000 civil penalty.
In addition, the Commission instituted administrative proceedings, made findings, and, pursuant to Rule 102(e) of the Commission's Rules of Practice, suspended Tornello from appearing and practicing before the SEC as an accountant, which includes not participating in the financial reporting or audits of public companies, with a right to apply for reinstatement after one year. Without admitting or denying the Commission's findings, Tornello consented to the suspension.
The company and Ronald Emma, Hill's former Chief Accounting Officer, previously settled the Commission's claims against them.
The investigation and litigation were conducted by John V. Donnelly III, Jack Easton, Cecilia B. Connor, and Daniel Berman, and supervised by Jennifer C. Barry, Kingdon Kase, and Kelly L. Gibson of the Philadelphia Regional Office.