Ernst & Young, auditors to pay over $10M to settle SEC charges

(Reuters) — Accounting firm Ernst & Young LLP, a partner and two former employees agreed to pay over $10 million to settle U.S. Securities and Exchange Commission charges they violated auditor independence rules, the agency said Monday.

Ernst & Young, partner James Herring and former partners James Young and Curt Fochtmann interfered with a public company's selection of an auditor, threatening their ability to remain objective and impartial as auditors, the SEC said.

The agency brought related charges against William Stiehl, previously chief accounting officer at the company, which the SEC did not name, for his role in the misconduct.

Attorneys for Ernst & Young and the individuals, who did not admit or deny the SEC's findings, did not respond immediately to requests for comment.

Sealed Air Corp, where Mr. Stiehl had been chief financial officer, said in 2019 it terminated his employment. A company spokesperson did not immediately respond to a call for comment.

"Auditor independence is not merely an obstacle to overcome, it is the bedrock foundation that supports the integrity, transparency, and reliability of financial reporting," SEC official Charles Cain said in a statement.

The audit firm agreed to pay $10 million to settle the civil charges. Mr. Herring, Mr. Young and Mr. Fochtmann agreed to pay $50,000, $25,000, and $15,000, respectively, and to temporary suspensions. Mr. Stiehl agreed to a fine of $51,000.