Compliance September 14, 2007

SEC Charges Auditors with SOX Violations

The Securities and Exchange Commission (SEC) charged 69 auditors with issuing audit reports on the financial statements of public companies although the firms were not registered with the Public Company Accounting Oversight Board (PCAOB).
Reported by

The regulator claims that the 37 unregistered audit firms and 32 audit partners violated the Sarbanes-Oxley Act of 2002, which requires that accounting firms that prepare and issue audit reports on the financial statements of public companies must be registered with the PCAOB, according to a statement. The SEC issued 29 settled and 10 contested orders.

The 69 firms and partners named in the action were collectively responsible for issuing 60 audit reports for 53 companies between November 2003 and October 2005, according to the SEC.

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Twenty-eight firms and 22 partners agreed to settlements in which the Commission found that each audit firm issued between one and eight audit reports while unregistered and ordered the firms and partners to not further violate the registration provision of Sarbanes-Oxley, Section 102(a).

Two firms charged by the SEC agreed to disgorge audit fees they received for their audits, while the other settling firms that received audit fees returned the fees to their issuers during the course of the SEC’s investigation.

A list of the firms can be found here.

The Markets September 14, 2007

ETF Assets Reach $505B in August

U.S. listed ETF assets rose by approximately $23 billion in August with size, sector, style, and fixed income ETFs experiencing considerable asset growth.
Reported by

State Street Global Advisors’ (SSgA) latest monthly statistical report indicated that size, sector, style, and fixed income ETFs enjoyed gains of $17 billion, $3 billion, $2 billion, and $1 billion, respectively. Seven new ETFs were launched during August, bringing the total number of ETFs to 507, managed by 17 ETF managers.

The top three managers in the US ETF marketplace as of August 31, 2007 were Barclays Global Investors (BGI), with assets under management reaching $284 billion in 136 ETFs, followed by State Street with $104 billion in 58 ETFs.

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The top three US ETFs in terms of dollar volume traded for the month were the SPDR S&P 500; the iShares Russell 2000 Index Fund; and the NASDAQ 100 Index Tracking Stock.

The top three US ETFs in terms of assets as of August 31, 2007 were the SPDR S&P 500, the iShares MSCI EAFE Fund, and the NASDAQ 100 Index Tracking Stock.

Information Technology, Consumer Staples, and Health Care were the top three performers, respectively returning 2.7%, 2.5%, and 2.3%.The Materials sector performed the poorest in August, returning -0.8%.

SSgA’s complete ETF report is available here.

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