backOn October 23, 2023, the SEC issued a settled Order sanctioning Luther Speight & Company (“LSC”) and its partner, Luther C. Speight, CPA, in connection with the audit of a Louisiana school board’s fiscal year 2019 financial statements, which the school board subsequently incorporated in offering documents for $120 million of municipal bonds it sold to investors.
The settled Order follows a complaint the SEC filed against the respondents in United States District Court for the Northern District of Georgia on September 27, 2023. In that complaint, the Commission alleged that LSC, through Speight, issued an auditor’s report that falsely stated that LSC had conducted the audit of the school board’s fiscal year 2019 financial statements in accordance with GAAS. The Commission alleged that LSC did not comply with GAAS in material respects, including by improperly backdating the audit report, by failing to undertake procedures required by subsequent events and subsequently discovered facts, and by failing to implement sufficient quality control procedures. The SEC also alleged that Speight and LSC knew, or should have known, that they failed to perform their audit in accordance with GAAS and that the school board would use the auditor’s report to sell municipal bonds to investors.
Under the settled Order entered on October 23, Speight and LSC, both of which neither admitted nor denied the SEC’s allegations, are barred from practicing before the Commission as accountants, with leave to file a petition for reinstatement after 3 years. Previously, in the civil action, the Commission obtained a consent order that enjoined Speight and LSC from future violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act and barred the defendants from participating in certain audits of municipalities’ financial statements.
The Case is In the Matter of Luther C. Speight, III, CPA and Luther Speight & Company, LLC. A copy of the settled Order is available here. A copy of the earlier consent order is available here.