Bell Nunnally & Martin LLP Partner Jeffrey J. Ansley obtained an Administrative Law Judge’s dismissal of all fraud charges against Scott W. Hatfield, a licensed CPA, and S.W. Hatfield, CPA (SWH), a public accounting firm based in Dallas (respondents) in an administrative proceeding brought by the Securities and Exchange Commission (SEC).
In the case of In the Matter of S.W. Hatfield, CPA, and Scott W. Hatfield, CPA, Administrative Proceeding No. 3-15012, the SEC’s Enforcement Division charged that respondents violated Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 by issuing dozens of allegedly fraudulent audit reports that were included in numerous public companies’ SEC filings. Through the action, the SEC sought against respondents an order imposing disgorgement of $187,822, substantial second-tier civil penalties and a permanent bar from practicing or appearing before the SEC.
After reviewing respondents’ opposition to the SEC’s Motion for Summary Disposition, the judge agreed with Bell Nunnally that neither Hatfield nor SWH willfully violated the antifraud provisions of the federal securities laws. Specifically, the judge found no evidence that respondents’ audit reports were false or contained any misrepresentations. Accordingly, pursuant to the recent U.S. Supreme Court holding in Janus Capital Group, Inc. v. First Derivative Traders, they could not have violated Section 10(b) or Rule 10b-5, leading the judge to dismiss all charges against Hatfield and SWH.
“We are very pleased with the judge’s decision in this matter,” said Ansley. “The court’s decision corroborates our contention that the SEC should never have brought this case against Scott and his firm, and it will allow him to, once again, focus his full attention on providing high-quality accounting, auditing and financial reporting services to publicly-owned companies.”
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Morgan Buckley
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morganb@bellnunnally.com
214-740-1445
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