BDO admitted wrongdoing and agreed to pay about $600,000 in the disgorgement of audit fees and interest and a $1.5 million penalty. It also agreed to comply with conditions related to its quality controls. The SEC also filed fraud charges against General Employment's then chairman and majority shareholder, Stephen B. Pence, a former U.S. attorney and a former lieutenant governor of Kentucky. Two former CEOs of General Employment agreed to settle separate charges, and

BDO's engagement partner on the 2009 audit Sean C. Henaghan and concurring reviewer John E. Rainis subsequently consulted with senior BDO partners including regional technical director James J. Gerace, national director of accounting Leland E. Graul, and national SEC practice director Wendy M. Hambleton.

Without admitting or denying the SEC's findings, Henaghan, Rainis, Gerace, and Graul agreed to suspensions with Henaghan paying a $30,000 penalty, Rainis, $15,000 penalty, and Gerace, Graul, and Hambleton $10,000 each.

The developments began when, near the end of the 2009 audit, BDO was advised by the company that $2.3 million supposedly invested in a 90-day nonrenewable CD wasn't repaid by the bank upon its maturity date and that a bank employee said there was no record of its purchase by the bank. That amount comprised about half of General Employment's assets and most of its cash.

BDO received conflicting stories about the CD's status and the firm did not receive any reasonable explanation why the funds went missing and an equivalent amount was later received by the company under what were termed suspicious circumstances. Despite the conflicting information, BDO withdrew its letter and issued unqualified opinions regarding its client's 2009 and 2010 financial statements.

Pence was accused of making misleading statements and omissions to BDO when questioned about the CD. He was also reported to be acting as an agent for Wilbur Anthony Huff, a Louisville, Ky., businessman, who was sentenced to 12 years in prison in January after pleading guilty to charges that included bribery and fraud. Although Pence create the appearance he was an independent majority shareholder and chairman, he was acting as an agent for Huff, who funded Pence's supposed acquisition.