SEC goes after firms in China and India

The U.S. Securities and Exchange Commission has charged the Chinese affiliates of Deloitte, Ernst & Young, KPMG, PwC and BDO with violating the U.S. Securities Exchange Act.

By refusing to produce paperwork related to investigations into accounting fraud, these firms ran afoul of securities laws, says an FT report.

The move has brought the spotlight back on the conflict between the U.S. and Chines laws. Firms that try to abide by legal requirements of one country, therefore, are caught offside of a contrasting set of laws in another country.

As a result, these audit firms were found to be “in a position of violating laws in both countries, the U.S. for failing to share documents and in China for sharing them.”

In another bold move in Asia, the SEC charged four financial services firms in India for providing brokerage services to U.S. institutional investors.

The four firms – Ambit Capital Private Limited, Edelweiss Financial Services Limited, JM Financial Institutional Securities Private Limited, and Motilal Oswal Securities Limited – are not registered with the SEC as required under the federal securities laws, says an SEC release.

The money managers engaged with U.S. investors in the following ways:

• Sponsored conferences in the U.S.
• Had employees travel regularly to the U.S. to meet with investors.
• Traded securities of India-based issuers on behalf of U.S. investors
• Participated in securities offerings from India-based issuers to U.S. investors.

The dealers agreed to pay more than $1.8 million combined to settle the charges.

Also read:

Mary Schapiro leaving SEC

SEC sanctions 2 advisory firms

SEC charges J.P. Morgan, Credit Suisse with misleading investors

SEC raps ratings agencies

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.