WASHINGTON: US market regulators slapped sanctions Friday on the Big Four global accounting firms over their 2012 refusal to turn over documents on Chinese companies under investigation.
The US Securities and Exchange Commission said that it had officially censured China-based units of the four, which agreed to undertake specific measures to better respond to SEC requests.
To settle the long-running case, which also pitted the SEC against Chinese government secrecy rules, the four also agreed to pay the exchange regulator $500,000 each.
The settlement involved the China units of Deloitte Touche Tohmatsu, Ernst & Young, KPMG, and PricewaterhouseCoopers, the world's four leading accounting groups.
The SEC said their China affiliates had refused to hand over requested documents in 2012 to support its probe into potential fraud in some of the more than 130 Chinese companies trading on US markets.
The accounting firms though had complained that they could fall afoul of Chinese laws by doing so, without a ruling in support by Chinese regulators.
One year ago a US judge ordered the four firm's Chinese units suspended from auditing US-traded companies for six months, saying they "wilfully violated" US laws.
Following that decision, the accountancies obtained support from the China Securities Regulatory Commission, and handed over requested documents to the SEC.
"As we repeatedly have stated throughout this litigation, obtaining an audit firm's work papers is critical to enforcement staff's ability adequately to protect investors from the dangers of accounting fraud," said SEC enforcement division director Andrew Ceresney in a statement.
"This settlement recognizes the SEC's substantial recent progress in obtaining those documents from registered firms in China."
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