The SEC has rejected the appeal of a Houston firm that was sanctioned by the Public Company Accounting Oversight Board. With a stay lifted, the permanent revocation of PCAOB registration will go into effect for CPA R. Everett Bassie and his firm, C.E. Bassie & Co. Bassie had appealed the bar and also a $75,000 civil money penalty ordered by the PCAOB for not producing a single requested document in 10 months and then ceasing to respond to the board requests.
The board alleged that Bassie repeatedly failed to produce documents and asked for extensions to meet the demands that stretched out because he used three different lawyers.The PCAOB staff after it began an investigation on Jan. 10, 2006 after the board had received information alleging that the firm "and one of its associated persons" may have failed to adhere to certain standards in auditing and reviewing financial statements of Calypso Wireless. It also asked for information about another Bassie client, American International Industries, because work for that company may have involved Calypso.
An initial decision of a revocation and bar and imposed on March 3, 2009 by a hearing officer, but there was no money penalty. On April 30 that year, Bassie and his firm petitioned for a review of the initial decision and then amended the petition on May 5. Bassie claimed he did not directly receive any correspondence from the PCAOB during the period in which he employed the first two of his attorneys. The board then affirmed the sanctions and added the $75,000 civil money penalty.
In his appeal, which automatically stayed the penalties, Bassie and the firm challenged the scope of the investigation and said the hearing officer erred in granting the Board a summary disposition. In rejecting these claims, the SEC also supported the PCAOB's refusal to consider an affidavit from Bassie because he failed to prove that additional evidence was material to the case. Bassie, it said, merely stated he was relying on his counsel's advice.
