SEC Impose $102K Fine on KSM

The U.S. Securities and Exchange Commission has sanctioned Indianapolis-based accounting firm Katz, Sapper & Miller LLP and one of its partners, Scott Price, for improper professional conduct in the audits of Mohlman Asset Management Fund LLC (MAMF)

Auditors were not Independent

One of the primary reasons of this fine was identified to be the independence of the Auditors. Each year, MAMF provided the Funds’ bank statements to KSM. To draft the Funds’ 2012 and 2013 year-end financial statements, KSM used the bank statements and other records MAMF provided to create a trial balance and then the financial statements, including the notes to the financial statements. KSM subsequently performed audit procedures, whereby KSM audited its own work.

In a filing posted earlier this week, the SEC said that it has accepted settlement offers from both KSM—the Indy area’s largest locally based accounting firm—and Price, 46, who lives in Carmel. 

Mohlman hired KSM in 2013 to audit the financial statements of two of its investment funds, and the accounting firm audited the funds for the fiscal years 2012-2015.

As part of the deal, Price paid the SEC a civil penalty of $15,000. Katz, Sapper & Miller paid nearly $102,000—a civil penalty of $63,104, disgorgement of $32,473, and prejudgment interest of $6,257.