SEC v. Prager Metis CPAs, LLC, No. 1:24-cv-07025, Southern District of New York (Sept. 18, 2024) — Judgment

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,
CLYLO $FWLRQ 1R &9
v.
Prager Metis CPAs, LLC,
Defendant.
[PROPOSED] FINAL JUDGMENT AS TO DEFENDANT PRAGER METIS CPAS LLC
The Securities and Exchange Commission having filed a Complaint and Defendant
Prager Metis CPAs, LLC (“Prager Metis”) having entered a general appearance; consented to the
Court’s jurisdiction over Defendant and the subject matter of this action; consented to entry of
this Final Judgment without admitting or denying the allegations of the Complaint (except as to
jurisdiction); waived findings of fact and conclusions of law; and waived any right to appeal
from this Final Judgment:
I.
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is
permanently restrained and enjoined from violating Sections 17(a)(2) and (3) of the Securities
Act of 1933 (the “Securities Act”) [15 U.S.C. §§ 77q(a)(2), (3)] in the offer or sale of any
security by the use of any means or instruments of transportation or communication in interstate
commerce or by use of the mails, directly or indirectly:
(a)to obtain money or property by means of any untrue statement of a material fact
or any omission of a material fact necessary in order to make the statements

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made, in light of the circumstances under which they were made, not misleading;
or
(b) to engage in any transaction, practice, or course of business which operates or
would operate as a fraud or deceit upon the purchaser.
 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided in
Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who
receive actual notice of this Final Judgment by personal service or otherwise:  (i) Defendant’s
officers, agents, servants, employees, and attorneys; and (ii) other persons in active concert or
participation with Defendant or with anyone described in (i).
II.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant shall pay a
civil penalty in the amount of $745,000 to the Securities and Exchange Commission pursuant to
Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)].  Defendant shall make this payment
within 30 days after entry of this Final Judgment.
Defendant may transmit payment electronically to the Commission, which will provide
detailed ACH transfer/Fedwire instructions upon request.  Payment may also be made directly
from a bank account via Pay.gov through the SEC website at
http://www.sec.gov/about/offices/ofm.htm
.  Defendant may also pay by certified check, bank
cashier’s check, or United States postal money order payable to the Securities and Exchange
Commission, which shall be delivered or mailed to
Enterprise Services Center
Accounts Receivable Branch
6500 South MacArthur Boulevard
Oklahoma City, OK 73169

and shall be accompanied by a letter identifying the case title, civil action number, and name of

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this Court; Prager Metis CPAs LLC as a defendant in this action; and specifying that payment is
made pursuant to this Final Judgment.
Defendant shall simultaneously transmit photocopies of evidence of payment and case
identifying information to the Commission’s counsel in this action.  By making this payment,
Defendant relinquishes all legal and equitable right, title, and interest in such funds and no part
of the funds shall be returned to Defendant.  The Commission shall send the funds paid pursuant
to this Final Judgment to the United States Treasury.
 The Commission may enforce the Court’s judgment for penalties by the use of all
collection procedures authorized by law, including the Federal Debt Collection Procedures Act,
28 U.S.C. § 3001 et seq., and moving for civil contempt for the violation of any Court orders
issued in this action.  Defendant shall pay post-judgment interest on any amounts due after 30
days of the entry of this Final Judgment pursuant to 28 USC § 1961.
III.
 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the Consent of
Defendant Prager Metis CPAs, LLC is incorporated herein with the same force and effect as if
fully set forth herein, and that Defendant shall comply with all of the undertakings and
agreements set forth therein, including, but not limited to, the undertakings to:
A. Independent Consultant
1. Retain, within sixty (60) days after the entry of this Order, an independent
consultant (“Independent Consultant”), not unacceptable to the Commission Staff in the Division
of Enforcement (“Commission Staff”).  Prager Metis shall provide the Commission Staff with
notice of possible Independent Consultant candidates no later than thirty (30) days following the
entry of this Order.  The Commission Staff shall have ten (10) business days to communicate

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whether the Independent Consultant candidates are not unacceptable to the Commission Staff.
Prager Metis shall, upon request by the Commission Staff, provide information about the
Independent Consultant’s work plan to the Commission Staff including the Independent
Consultant’s experience, ability to staff the engagement, and expertise in auditing and audit firm
quality controls.  Prager Metis shall provide to the Commission Staff a copy of the engagement
letter detailing the scope of the Independent Consultant’s responsibilities within three (3) months
after the entry of this Order.  If requested by Commission Staff, Prager Metis shall make the
Independent Consultant available to Commission Staff to make presentations, provide updates,
and explain the work, progress, and conclusions.  The Independent Consultant shall have the
authority to employ legal counsel, consultants, investigators, experts, and other personnel
necessary to assist in the proper discharge of the Independent Consultant’s duties. The
Independent Consultant’s compensation and reasonable expenses shall be borne exclusively by
Prager Metis.
2. To ensure the independence of the Independent Consultant, Prager Metis:  shall
not have the authority to terminate the Independent Consultant or substitute another independent
consultant for the initial Independent Consultant, without the prior written approval of the
Commission Staff; and shall compensate the Independent Consultant and persons engaged to
assist the Independent Consultant for services rendered pursuant to this Order at their reasonable
and customary rates.
3. Prager Metis will require the Independent Consultant to enter into an agreement
that provides that, for the period of engagement and for a period of two (2) years after the
issuance of the Independent’s Consultant’s final report (as defined in Paragraph III.11), the
Independent Consultant shall not enter into any employment, consultant, attorney-client, auditing

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or other professional relationship with Prager Metis, or any of its present or former affiliates,
directors, officers, partners, employees, or agents acting in their capacity as such.  The agreement
will also provide that the Independent Consultant will require that any firm with which he/she is
affiliated or of which he/she is a member, and any person engaged to assist the Independent
Consultant in the performance of his/her duties under this Order shall not, without prior written
consent of the Commission Staff, enter into any employment, consultant, attorney-client,
auditing or other professional relationship with Prager Metis, or any of its present or former
affiliates, directors, officers, partners, employees, or agents acting in their capacity as such for
the period of the engagement and for a period of two (2) years after the issuance of the
Independent Consultant’s final report (as defined by Paragraph III.11).
4. With respect to Commission Staff, Prager Metis will not assert any legal privilege
over communications with or work product prepared by the Independent Consultant.
B. Scope of Independent Consultant’s Review
5. Within the time periods specified below, the Independent Consultant will review
and evaluate Prager Metis’s audit, review, and quality control policies and procedures—as to,
among other aspects, their sufficiency, adequacy, design, implementation, operation, and
effectiveness—applicable to Audit Clients
1
regarding the subjects set forth below.  The
Independent Consultant’s purpose for this review and evaluation will be to make
recommendations for improvements to policies and procedures consistent with applicable
professional guidance and standards that:
a. Provide reasonable assurance that personnel comply with applicable
professional standards and the firm’s standards of quality including:

1
 An “Audit Client,” for purposes of these undertakings, means any client of Prager Metis that is an SEC registrant
or any client for which the audit or review services was required by the federal securities laws.

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i. That due care, professional judgment, and professional skepticism are
exercised in the planning and performance of the audit and the
preparation of the report;
ii. That engagement partners are properly supervising the work of
engagement team members for compliance with applicable
professional standards, including reviewing the work of engagement
team members to evaluate whether the work was appropriately
performed and documented and that the results of the work support the
conclusions reached;
iii. That auditors are obtaining an understanding of the entity being
audited and its environment, including (a) relevant industry,
regulatory, and other external factors, including the applicable
financial reporting framework; (b) the nature of the entity, its
operations, and its ownership and governance structures; and (c) the
entity’s internal control;
iv. That auditors are identifying and assessing the risks of material
misstatements in the financial statements, including by identifying
which risks are significant by considering at least (a) whether the risk
is a risk of fraud; (b) whether the risk is related to recent significant
economic, accounting, or other developments; (c) the complexity of
transactions; and (d) whether the risk involves significant transactions
with related parties;

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v. That auditors are developing and modifying, as necessary, an audit
plan that includes, among other things, the nature and extent of
planned risk assessment procedures;
vi. That auditors are planning and performing audit procedures that
identify, assess, and respond to risks of material misstatement,
including but not limited to those arising from the entity’s failure to
appropriately account for or disclose related party relationships,
transactions, or balances, understanding that the nature of related party
relationships and transactions may, in some circumstances, give rise to
higher risks of material misstatement of the financial statements than
transactions with unrelated parties;
vii. That auditors are documenting the procedures performed, evidence
obtained, and conclusions reached, and that audit documentation
contains sufficient information for an experienced auditor, having no
previous connection with the engagement to (a) understand the nature,
timing, extent, and results of the procedures performed to comply with
applicable professional standards; the results of the audit procedures
performed, and the audit evidence obtained; and significant findings or
issues arising during the audit, the conclusions reached thereon, and
significant professional judgments made in reaching those conclusions,
and (b) to determine who performed the work and the date such work
was completed, as well as the person who reviewed the work and the
date of such review;

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viii. That a complete and final set of audit documentation is assembled for
retention as of a date not more than 45 days after the report release
date (“documentation completion date”) and that documentation
requirements are also met for unfinished or incomplete engagements;
ix. That audit documentation is not deleted or discarded after the
documentation completion date before the end of a specified retention
period and that any information and documentation added after the
documentation completion date indicates the date the information was
added, the name of the person who prepared the additional
documentation, and the reason for adding it;
x. That the firm follows its standards of quality and applicable
professional standards with respect to the selection of engagement
quality control reviewers;
xi. That engagement quality reviewers and others who assist the reviewer
should not make decisions on behalf of the engagement team or
assume any of the responsibilities of the engagement team;
xii. That engagement quality review should contain sufficient information
to enable an experienced auditor, having no previous connection with
the engagement, to understand the procedures performed by the
engagement quality reviewer, and others who assisted the reviewer, to
comply with the provisions of this standard, including information that
identifies: (a) the documents reviewed by the engagement quality
reviewer, and others who assisted the reviewer, and (b) the date the

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engagement quality reviewer provided concurring approval of issuance
or, if no concurring approval of issuance was provided, the reasons for
not providing the approval; and
xiii. That engagement quality review should perform an objective
evaluation of the significant judgments made by the engagement team
and the conclusions reached in formulating the auditor's report,
including (a) discussion of significant findings or issues with the
engagement; (b) reading the financial statements and the proposed
auditor's report; (c) review of selected audit documentation relating to
the significant judgments the engagement team made and the related
conclusions it reached; and (d) evaluation of the conclusions reached
in formulating the auditor’s report and consideration of whether the
proposed auditor's report is appropriate.
b. Provide the firm with reasonable assurance that the firm’s policies and
procedures concerning quality control standards are suitably designed
pursuant to applicable professional standards and are being effectively applied
and monitored.
c. Provide the firm with reasonable assurance that the firm is properly
undertaking or continuing client relationships and engagements only when the
firm is competent to perform the engagement and has the capabilities,
including time and resources, to do so.
d. Provide the firm with reasonable assurance that the firm is assigning
appropriate personnel, including engagement partners, with the necessary

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competence and capabilities to perform engagements in accordance with
professional standards and applicable legal and regulatory requirements, to
engagement teams.
e. Provide the firm with reasonable assurance that the firm has a monitoring
process concerning whether the policies and procedures relating to its system
of quality control are relevant, adequate, and operating effectively.
f. Provide the firm with reasonable assurance that its public audit practice leader
is appropriate to lead that practice, including whether he has a proven ability
to follow firm standards of quality and applicable professional standards.
g. Provide the firm with reasonable assurance that the firm’s policies and
procedures relating to auditor independence are suitably designed pursuant to
applicable professional standards and are being effectively applied.
6. Prager Metis shall cooperate fully with the Independent Consultant and shall
provide reasonable and timely access to any Prager Metis partner, employee, agent, or
consultant, and to any information and records (including audit and consultation documents), as
the Independent Consultant may reasonably request for the Independent Consultant’s review and
evaluation described in Paragraph III.5 above and the reports specified in Paragraphs III.7
through III.12 below.
C. Independent Consultant Reports and Certifications
7. Within eight (8) months after the entry of this Order, Prager Metis shall require
the Independent Consultant to issue a detailed written report (“Initial Report”) to Prager Metis:
(i) describing the Independent Consultant’s review and evaluation of each of the areas identified
in Paragraph III.5. and its subsections above; and (ii) making recommendations, where

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appropriate, reasonably designed to ensure that audits conducted by Prager Metis comply with
applicable professional standards and any applicable federal securities laws.  Prager Metis shall
require the Independent Consultant to provide a copy of the Initial Report to the Commission
Staff when the Initial Report is issued.  Prager Metis shall also make the Independent Consultant
available to Commission Staff to discuss its work both periodically and after issuance of the
Initial Report.
8. Prager Metis will adopt and implement, as soon as practicably possible, but in any
event no later than two (2) years after the entry of this Order, and in compliance with the
requirements set forth in Paragraphs III.10 through III.15 below, all recommendations of the
Independent Consultant in the Initial Report.  Provided, however, that within thirty (30) days of
issuance of the Initial Report, Prager Metis may advise the Independent Consultant in writing of
any recommendation that it considers to be unnecessary, unjust, outside the scope of this Order,
unduly burdensome, or impractical.  Prager Metis need not adopt any such unnecessary, unjust,
outside the scope of this Order, unduly burdensome, or impractical recommendation at that time,
but instead may propose in writing to the Independent Consultant an alternative recommendation
(an “Alternative Recommendation”) designed to achieve the same objective or purpose.  Prager
Metis will provide any such Alternative Recommendation(s) to the Commission Staff at the
same time that Prager Metis submits such Alternative Recommendation(s) to the Independent
Consultant.  Prager Metis and the Independent Consultant shall engage in good faith negotiations
in an effort to reach agreement on any recommendations objected to by Prager Metis.
9. In the event that the Independent Consultant and Prager Metis are unable to agree
on any Alternative Recommendation(s) within sixty (60) days of the issuance of the Initial
Report, Prager Metis shall abide by the determinations of the Independent Consultant.

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10. Within sixty (60) days of issuance of the Initial Report, Prager Metis will certify
to the Commission Staff in writing that (i) Prager Metis has adopted and has implemented or will
implement all recommendations of the Independent Consultant; and (ii) the Independent
Consultant agrees that Prager Metis has adopted, implemented, and/or has a plan for
implementation (the “Certification of Agreement to Adopt Recommendations”).  Prager
Metis will provide a copy of the Certification of Agreement to Adopt Recommendations to the
Commission Staff.  To the extent that Prager Metis has not implemented all recommendations
contained in the Initial Report by that time, Prager Metis will certify to the Commission Staff in
writing, no later than thirty (30) days after their implementation, that (i) Prager Metis has
adopted and has implemented all recommendations contained in the Initial Report; and (ii) the
Independent Consultant agrees that the recommendations have been adequately adopted and
implemented by Prager Metis (“Implementation Certification”).
11. Within six (6) months of the issuance of the Initial Report or the Implementation
Certification, whichever is later, Prager Metis shall require the Independent Consultant to
complete testing to assess (i) whether Prager Metis has implemented the written policies and
procedures concerning the areas specified in Paragraph III.5 and its subsections above and (ii)
the effectiveness of the design and implementation of those policies and procedures.  At least
thirty (30) days prior to beginning the testing, Prager Metis shall provide to the Commission
Staff a copy of the scope and parameters for testing.  The Commission Staff shall have ten (10)
days to provide comments.  Within thirty (30) days of the completion of this testing, Prager
Metis shall require the Independent Consultant to issue a written report summarizing the results
of the Independent Consultant’s testing and assessment, and if applicable, any recommendations
(“Final Report”) and to provide a copy of the Final Report to the Commission Staff.  At this

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time, if the Independent Consultant determines that Prager Metis has adopted and implemented
all recommendations set forth in the Initial Report and that Prager Metis’s quality control
policies addressing those recommendations and the policies specified in Paragraph III.5 and its
subsections are functioning effectively, Prager Metis shall require the Independent Consultant to
certify in writing that Prager Metis has satisfied such undertakings (“Independent Consultant
Certification”) and provide a copy of this certification to the Commission Staff.  In all events,
Prager Metis must complete all undertakings concerning the implementation of the
recommendations set forth in the Independent Consultant’s Initial Report, and any amended
recommendations, and provide the Independent Consultant Certification to the Commission Staff
no later than two (2) years after the entry of this Order.
12. To the extent that the Final Report has additional recommendations that Prager
Metis has not implemented, within thirty (30) days of issuance of the Final Report, Prager Metis
will certify to the Commission Staff in writing that it has adopted and has implemented or will
implement all additional recommendations of the Independent Consultant (“Final Certification
of Agreement to Adopt Recommendations”).  Prager Metis will provide a copy of the Final
Certification of Agreement to Adopt Recommendations to the Commission Staff.  To the extent
that Prager Metis has not implemented all additional recommendations contained in the Final
Report by that time, Prager Metis will certify to the Commission Staff in writing, by thirty (30)
days after their implementation, that Prager Metis has adopted and has implemented all
recommendations contained in the Final Report (“Final Implementation Certification”).  In all
events, Prager Metis must complete all undertakings concerning the implementation of the
recommendations set forth in the Independent Consultant’s Final Report no later than four (4)
months after the issuance of the Final Report.

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13. The Initial Report, Final Report, Certification of Agreement to Adopt
Recommendations, Implementation Certification, Independent Consultant Certification, Final
Certification of Agreement to Adopt Recommendations, and Final Implementation Certification,
and any related correspondence or other documents shall be submitted to Michael Brennan,
Assistant Director, Division of Enforcement, Securities and Exchange Commission, 100 F Street
NE, Washington, DC 20549; and Amy Flaherty Hartman, Assistant Regional Director, Division
of Enforcement, Securities and Exchange Commission, Chicago Regional Office, 175 W.
Jackson Blvd, Suite 1450, Chicago, IL 60604; with a copy to the Office of Chief Counsel of the
Enforcement Division, 100 F Street NE, Washington DC, 20549.
14. The Initial Report and Final Report by the Independent Consultant will likely
include confidential financial, proprietary, competitive business or commercial information.
Public disclosure of these reports could discourage cooperation, impede pending or potential
government investigations or undermine the objectives of the reporting requirement.  For these
reasons, among others, these reports and the contents thereof are intended to remain and shall
remain non-public, except (i) pursuant to court order, (ii) as agreed to by the parties in writing,
(iii) to the extent that the Commission determines in its sole discretion that disclosure would be
in furtherance of the Commission’s discharge of its duties and responsibilities, or (iv) is
otherwise required by law.
15. No later than sixty (60) days from the date that Prager Metis signs the Final
Implementation Certification, Prager Metis’s Global Managing Partner and Prager Metis’s leader
of quality control policies and procedures shall both certify, in writing, compliance with the
undertakings set forth above.  The certification shall identify the undertakings, provide written
evidence of compliance in the form of a narrative, and be supported by exhibits sufficient to

15

demonstrate compliance.  The Commission Staff may make reasonable requests for further
evidence of compliance, and Prager Metis agrees to provide such evidence.  This certification
and supporting material shall be submitted to the individuals identified in Paragraph III.13 no
later than sixty (60) days from the date of the completion of the undertakings.
16. For good cause shown, and solely at the discretion of the Commission Staff, the
Commission Staff may extend any of the procedural dates relating to the undertakings.
Deadlines for procedural dates shall be counted in calendar days, except that if the last day falls
on a weekend or federal holiday, the next business day shall be considered to be the last day.
17. If the Commission Staff believes that Prager Metis has not satisfied these
undertakings, the Commission Staff may petition the Commission to reopen the matter to
determine whether additional sanctions are appropriate.
D. Acceptance of New Audit Clients
18. Between the date of entry of this Order and the date on which Prager Metis
provides a copy of the Certification of Agreement to Adopt Recommendations to the
Commission Staff, and pursuant to the Independent Consultant’s review and approval as
provided in Paragraph III.19.a, Prager Metis shall accept no more than one (1) new audit client
(“New Audit Client”) per quarter.
2
  Quarters shall be calculated starting with the date of entry of
this Order, running in ninety (90) day increments thereafter. To the extent Prager Metis accepts
fewer New Audit Clients than the maximum allowable within a quarter, the number of allowable
New Audit Clients will “rollover” into subsequent quarters. The Independent Consultant shall
report to the Commission Staff on a quarterly basis the New Audit Clients Prager Metis has

2
 A New Audit Client is defined as an entity seeking audit services from Prager Metis that is (a) an issuer, as that
term is defined in Section 2(a)(7) of the Sarbanes-Oxley Act of 2002; or (b) is seeking audit services for the purpose
of registering securities with the Commission.

16

accepted and will confirm that the Independent Consultant has approved acceptance of such New
Audit Clients pursuant to the New Audit Client Protocol described in Paragraph III.19.a.
19. Between the date of the entry of this Order and the date on which Prager Metis
provides a copy of the Implementation Certification to the Commission Staff, the Independent
Consultant shall review and approve any New Audit Clients, pursuant to the following:
a. Prager Metis shall provide the Independent Consultant a minimum of sixty (60)
days to prepare a written protocol for reviewing and approving the New Audit
Clients (“New Audit Client Protocol”). The sixty (60) day period shall commence
on the date upon which the Independent Consultant is formally retained by Prager
Metis. Prager Metis shall require the Independent Consultant to provide a copy of
the New Audit Client Protocol to the Commission Staff. The Commission Staff
shall have ten (10) business days to communicate whether the New Audit Client
Protocol is not unacceptable to the Commission Staff. The New Audit Client
Protocol shall outline, at a sufficient level of detail, procedures to be performed in
connection with the review of any prospective New Audit Client, including
documents and information to be requested and reviewed, factors to be analyzed,
and discussions, meetings, or interviews to be held, as needed. The New Audit
Client Protocol shall also outline documentation to be created, in connection with
the review of any prospective New Audit Client, which documentation shall
memorialize, at a sufficient level of detail, procedures performed and conclusions
reached in connection with the review of any prospective New Audit Client (the
“New Audit Client Acceptance Documentation”). The New Audit Client Protocol
shall also take into consideration the following factors:

17

i. whether as of the date the proposed new engagement is considered, Prager
Metis’s policies, procedures, and quality control system, as known or
observed by the Independent Consultant at the time of acceptance, are
sufficient for Prager Metis to conduct the engagement in accordance with
all applicable professional standards;
ii. whether the proposed engagement partner, engagement quality reviewer
(“EQR”), and engagement team members at the level of manager and
above possess the requisite competence, experience, and technical
proficiency to conduct the engagement in accordance with PCAOB
auditing standards;
iii. whether the proposed engagement partner, EQR, and engagement team
members have sufficient capacity to complete their respective
responsibilities within the requisite time frame and with professional
competence and in accordance with all applicable professional standards;
and
iv. whether the staffing resources proposed to be dedicated to the engagement
are sufficient to conduct the engagement in accordance with applicable
professional standards.
b. Prager Metis shall require the Independent Consultant to apply the New Audit
Client Protocol to assess and approve any New Audit Clients. New Audit Client
Acceptance Documentation must be completed, in a sufficient level of detail, in
connection with the review of any prospective New Audit Client; such
documentation must also be sufficient to reflect the date upon which the New

18

Audit Client Protocol procedures were performed, and that such procedures were
performed prior to any formal acceptance of the New Audit Client by Prager
Metis. In the event the Independent Consultant does not approve the acceptance
of a New Audit Client, Prager Metis shall not accept the client.
c. Prager Metis shall maintain all New Audit Client Acceptance Documentation for
a period of seven (7) years, regardless of whether a New Audit Client was
accepted, and shall make such documentation available to Commission Staff upon
request, within five (5) business days of any such request.
E. Other Matters
20. Prager Metis shall require each audit professional to undergo training, as
applicable, related to the areas specified in Paragraph III.5 and its subsections above.
21. Prager Metis shall certify, in writing, compliance with the undertakings set forth
above.  The certification shall identify the undertakings, provide written evidence of compliance
in the form of a narrative, and be supported by exhibits sufficient to demonstrate compliance.
The Commission staff may make reasonable requests for further evidence of compliance, and
Defendant agrees to provide such evidence.  Defendant shall submit the certification and
supporting material to the individuals identified in Paragraph III.13 no later than sixty (60) days
from the date of the completion of the undertakings.

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IV.
 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court shall retain
jurisdiction of this matter for the purposes of enforcing the terms of this Final Judgment.

Dated:  ______________, 2024
________________________________
UNITED STATES DISTRICT JUDGE

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

SECURITIES AND EXCHANGE COMMISSION,

Plaintiff,
                                                                                                C.A.                                                                                                No.                                                                                                __-____ (     )
v.

Prager Metis CPAs, LLC,

Defendant.

CONSENT OF DEFENDANT PRAGER METIS CPAS LLC

1. Defendant Prager Metis CPAs, LLC (“Defendant” or “Prager Metis”) waives
service of a summons and the complaint in this action, enters a general appearance, and admits
the Court’s jurisdiction over Defendant and over the subject matter of this action.
2. Without admitting or denying the allegations of the complaint (except as provided
herein in Paragraph 32 and except as to personal and subject matter jurisdiction, which
Defendant admits), Defendant hereby consents to the entry of the final Judgment in the form
attached hereto (the “Final Judgment”) and incorporated by reference herein, which, among other
things:
a. permanently restrains and enjoins Defendant from violation of Sections
17(a)(2) and (a)(3) of the Securities Act of 1933 (the “Securities Act”) [15 U.S.C. §§ 77q(a)(2)
and (a)(3)] as set forth in the Final Judgment;
b. orders Defendant to pay a civil penalty in the amount of $745,000 under
Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)]; and
c. comply with the undertakings set forth herein and in the Final Judgment.

2

3. Defendant agrees that it shall not seek or accept, directly or indirectly,
reimbursement or indemnification from any source, including but not limited to payment made
pursuant to any insurance policy, with regard to any civil penalty amounts that Defendant pays
pursuant to the Final Judgment, regardless of whether such penalty amounts or any part thereof
are added to a distribution fund or otherwise used for the benefit of investors. Defendant further
agrees that it shall not claim, assert, or apply for a tax deduction or tax credit with regard to any
federal, state, or local tax for any penalty amounts that Defendant pays pursuant to the Final
Judgment, regardless of whether such penalty amounts or any part thereof are added to a
distribution fund or otherwise used for the benefit of investors.
A. Independent Consultant
4. Defendant undertakes to Retain, within sixty (60) days after the entry of this
Order, an independent consultant (“Independent Consultant”), not unacceptable to the
Commission Staff in the Division of Enforcement (“Commission Staff”). Prager shall provide
the Commission Staff with notice of possible Independent Consultant candidates no later than
thirty (30) days following the entry of this Order. The Commission Staff shall have ten (10)
business days to communicate whether the Independent Consultant candidates are not
unacceptable to the Commission Staff. Prager Metis shall, upon request by the Commission
Staff, provide information about the Independent Consultant’s work plan to the Commission
Staff including the Independent Consultant’s experience, ability to staff the engagement, and
expertise in auditing and audit firm quality controls. Prager Metis shall provide to the
Commission Staff a copy of the engagement letter detailing the scope of the Independent
Consultant’s responsibilities within three (3) months after the entry of this Order. If requested by
Commission Staff, Prager Metis shall make the Independent Consultant available to Commission

3

Staff to make presentations, provide updates, and explain the work, progress, and conclusions.
The Independent Consultant shall have the authority to employ legal counsel, consultants,
investigators, experts, and other personnel necessary to assist in the proper discharge of the
Independent Consultant’s duties. The Independent Consultant’s compensation and reasonable
expenses shall be borne exclusively by Prager Metis.
5. To ensure the independence of the Independent Consultant, Prager Metis: shall
not have the authority to terminate the Independent Consultant or substitute another independent
consultant for the initial Independent Consultant, without the prior written approval of the
Commission Staff; and shall compensate the Independent Consultant and persons engaged to
assist the Independent Consultant for services rendered pursuant to this Order at their reasonable
and customary rates.
6. Prager Metis will require the Independent Consultant to enter into an agreement
that provides that, for the period of engagement and for a period of two (2) years after the
issuance of the Independent’s Consultant’s final report (as defined in Paragraph 14), the
Independent Consultant shall not enter into any employment, consultant, attorney-client, auditing
or other professional relationship with Prager Metis, or any of its present or former affiliates,
directors, officers, partners, employees, or agents acting in their capacity as such. The agreement
will also provide that the Independent Consultant will require that any firm with which he/she is
affiliated or of which he/she is a member, and any person engaged to assist the Independent
Consultant in the performance of his/her duties under this Order shall not, without prior written
consent of the Commission Staff, enter into any employment, consultant, attorney-client,
auditing or other professional relationship with Prager Metis, or any of its present or former
affiliates, directors, officers, partners, employees, or agents acting in their capacity as such for

4

the period of the engagement and for a period of two (2) years after the issuance of the
Independent Consultant’s final report (as defined by Paragraph 14).
7. With respect to Commission Staff, Prager Metis will not assert any legal privilege
over communications with or work product prepared by the Independent Consultant.
B. Scope of Independent Consultant’s Review
8. Within the time periods specified below, the Independent Consultant will review
and evaluate Prager Metis’s audit, review, and quality control policies and procedures—as to,
among other aspects, their sufficiency, adequacy, design, implementation, operation, and
effectiveness—applicable to Audit Clients
1
 regarding the subjects set forth below. The
Independent Consultant’s purpose for this review and evaluation will be to make
recommendations for improvements to policies and procedures consistent with applicable
professional guidance and standards that:
a. Provide reasonable assurance that personnel comply with applicable
professional standards and the firm’s standards of quality including:
i. That due care, professional judgment, and professional skepticism are
exercised in the planning and performance of the audit and the
preparation of the report;
ii. That engagement partners are properly supervising the work of
engagement team members for compliance with applicable
professional standards, including reviewing the work of engagement
team members to evaluate whether the work was appropriately

1
 An “Audit Client,” for purposes of these undertakings, means any client of Prager Metis that is an SEC registrant
or any client for which the audit or review services is required by the federal securities laws.

5

performed and documented and that the results of the work support the
conclusions reached;
iii. That auditors are obtaining an understanding of the entity being
audited and its environment, including (a) relevant industry,
regulatory, and other external factors, including the applicable
financial reporting framework; (b) the nature of the entity, its
operations, and its ownership and governance structures; and (c) the
entity’s internal control;
iv. That auditors are identifying and assessing the risks of material
misstatements in the financial statements, including by identifying
which risks are significant by considering at least (a) whether the risk
is a risk of fraud; (b) whether the risk is related to recent significant
economic, accounting, or other developments; (c) the complexity of
transactions; and (d) whether the risk involves significant transactions
with related parties;
v. That auditors are developing and modifying, as necessary, an audit
plan that includes, among other things, the nature and extent of
planned risk assessment procedures;
vi. That auditors are planning and performing audit procedures that
identify, assess, and respond to risks of material misstatement,
including but not limited to those arising from the entity’s failure to
appropriately account for or disclose related party relationships,
transactions, or balances, understanding that the nature of related party

6

relationships and transactions may, in some circumstances, give rise to
higher risks of material misstatement of the financial statements than
transactions with unrelated parties;
vii. That auditors are documenting the procedures performed, evidence
obtained, and conclusions reached, and that audit documentation
contains sufficient information for an experienced auditor, having no
previous connection with the engagement to (a) understand the nature,
timing, extent, and results of the procedures performed to comply with
applicable professional standards; the results of the audit procedures
performed, and the audit evidence obtained; and significant findings or
issues arising during the audit, the conclusions reached thereon, and
significant professional judgments made in reaching those conclusions,
and (b) to determine who performed the work and the date such work
was completed, as well as the person who reviewed the work and the
date of such review;
viii. That a complete and final set of audit documentation is assembled for
retention as of a date not more than 45 days after the report release
date (“documentation completion date”) and that documentation
requirements are also met for unfinished or incomplete engagements;
ix. That audit documentation is not deleted or discarded after the
documentation completion date before the end of a specified retention
period and that any information and documentation added after the
documentation completion date indicates the date the information was

7

added, the name of the person who prepared the additional
documentation, and the reason for adding it;
x. That the firm follows its standards of quality and applicable
professional standards with respect to the selection of engagement
quality control reviewers;
xi. That engagement quality reviewers and others who assist the reviewer
should not make decisions on behalf of the engagement team or
assume any of the responsibilities of the engagement team;
xii. That engagement quality review should contain sufficient information
to enable an experienced auditor, having no previous connection with
the engagement, to understand the procedures performed by the
engagement quality reviewer, and others who assisted the reviewer, to
comply with the provisions of this standard, including information that
identifies (a) the documents reviewed by the engagement quality
reviewer, and others who assisted the reviewer, and (b) the date the
engagement quality reviewer provided concurring approval of issuance
or, if no concurring approval of issuance was provided, the reasons for
not providing the approval; and
xiii. That engagement quality review should perform an objective
evaluation of the significant judgments made by the engagement team
and the conclusions reached in formulating the auditor’s report,
including (a) discussion of significant findings or issues with the
engagement; (b) reading the financial statements and the proposed

8

auditor's report; (c) review of selected audit documentation relating to
the significant judgments the engagement team made and the related
conclusions it reached; and (d) evaluation of the conclusions reached
in formulating the auditor’s report and consideration of whether the
proposed auditor's report is appropriate.
b. Provide the firm with reasonable assurance that the firm’s policies and
procedures concerning quality control standards are suitably designed
pursuant to applicable professional standards and are being effectively applied
and monitored.
c. Provide the firm with reasonable assurance that the firm is properly
undertaking or continuing client relationships and engagements only when the
firm is competent to perform the engagement and has the capabilities,
including time and resources, to do so.
d. Provide the firm with reasonable assurance that the firm is assigning
appropriate personnel, including engagement partners, with the necessary
competence and capabilities to perform engagements in accordance with
professional standards and applicable legal and regulatory requirements, to
engagement teams.
e. Provide the firm with reasonable assurance that the firm has a monitoring
process concerning whether the policies and procedures relating to its system
of quality control are relevant, adequate, and operating effectively.

9

f. Provide the firm with reasonable assurance that its public audit practice leader
is appropriate to lead that practice, including whether he has a proven ability
to follow firm standards of quality and applicable professional standards.
g. Provide the firm with reasonable assurance that the firm’s policies and
procedures relating to auditor independence are suitably designed pursuant to
applicable professional standards and are being effectively applied.
9. Prager shall cooperate fully with the Independent Consultant and shall provide
reasonable and timely access to any Prager Metis partner, employee, agent, or consultant, and to
any information and records (including audit and consultation documents), as the Independent
Consultant may reasonably request for the Independent Consultant’s review and evaluation
described in Paragraph 8 above and the reports specified in Paragraphs 10 through 15 below.
C. Independent Consultant Reports and Certifications
10. Within eight (8) months after the entry of this Order, Prager Metis shall require
the Independent Consultant to issue a detailed written report (“Initial Report”) to Prager Metis:
(i) describing the Independent Consultant’s review and evaluation of each of the areas identified
in Paragraph 8 and its subsections above; and (ii) making recommendations, where appropriate,
reasonably designed to ensure that audits conducted by Prager Metis comply with applicable
professional standards and any applicable federal securities laws. Prager Metis shall require the
Independent Consultant to provide a copy of the Initial Report to the Commission Staff when the
Initial Report is issued. Prager Metis shall also make the Independent Consultant available to
Commission Staff to discuss its work both periodically and after issuance of the Initial Report.
11. Prager Metis will adopt and implement, as soon as practicably possible, but in any
event no later than two (2) years after the entry of this Order, and in compliance with the

10

requirements set forth in Paragraphs 13-18 below, all recommendations of the Independent
Consultant in the Initial Report. Provided, however, that within thirty (30) days of issuance of the
Initial Report, Prager Metis may advise the Independent Consultant in writing of any
recommendation that it considers to be unnecessary, unjust, outside the scope of this Order,
unduly burdensome, or impractical. Prager Metis need not adopt any such unnecessary, unjust,
outside the scope of this Order, unduly burdensome, or impractical recommendation at that time,
but instead may propose in writing to the Independent Consultant an alternative recommendation
(an “Alternative Recommendation”) designed to achieve the same objective or purpose. Prager
Metis will provide any such Alternative Recommendation(s) to the Commission Staff at the
same time that Prager Metis submits such Alternative Recommendation(s) to the Independent
Consultant. Prager Metis and the Independent Consultant shall engage in good faith negotiations
in an effort to reach agreement on any recommendations objected to by Prager Metis.
12. In the event that the Independent Consultant and Prager Metis are unable to agree
on any Alternative Recommendation(s) within sixty (60) days of the issuance of the Initial
Report, Prager Metis shall abide by the determinations of the Independent Consultant.
13. Within sixty (60) days of issuance of the Initial Report, Prager Metis will certify
to the Commission Staff in writing that (i) Prager Metis has adopted and has implemented or will
implement all recommendations of the Independent Consultant; and (ii) the Independent
Consultant agrees that Prager Metis has adopted, implemented, and/or has a plan for
implementation (the “Certification of Agreement to Adopt Recommendations”). Prager Metis
will provide a copy of the Certification of Agreement to Adopt Recommendations to the
Commission Staff. To the extent that Prager Metis has not implemented all recommendations
contained in the Initial Report by that time, Prager Metis will certify to the Commission Staff in

11

writing, no later than thirty (30) days after their implementation, that (i) Prager Metis has
adopted and has implemented all recommendations contained in the Initial Report; and (ii) the
Independent Consultant agrees that the recommendations have been adequately adopted and
implemented by Prager Metis (“Implementation Certification”).
14. Within six (6) months of the issuance of the Initial Report or the Implementation
Certification, whichever is later, Prager Metis shall require the Independent Consultant to
complete testing to assess (i) whether Prager Metis has implemented the written policies and
procedures concerning the areas specified in Paragraph 8 and its subsections above and (ii) the
effectiveness of the design and implementation of those policies and procedures. At least thirty
(30) days prior to beginning the testing, Prager Metis shall provide to the Commission Staff a
copy of the scope and parameters for testing. The Commission Staff shall have ten (10) days to
provide comments. Within thirty (30) days of the completion of this testing, Prager Metis shall
require the Independent Consultant to issue a written report summarizing the results of the
Independent Consultant’s testing and assessment, and if applicable, any recommendations
(“Final Report”) and to provide a copy of the Final Report to the Commission Staff. At this
time, if the Independent Consultant determines that Prager Metis has adopted and implemented
all recommendations set forth in the Initial Report and that Prager Metis’s quality control
policies addressing those recommendations and the policies specified in Paragraph 8 and its
subsections are functioning effectively, Prager Metis shall require the Independent Consultant to
certify in writing that Prager Metis has satisfied such undertakings (“Independent Consultant
Certification”) and provide a copy of this certification to the Commission Staff. In all events,
Prager Metis must complete all undertakings concerning the implementation of the
recommendations set forth in the Independent Consultant’s Initial Report, and any amended

12

recommendations, and provide the Independent Consultant Certification to the Commission Staff
no later than two (2) years after the entry of this Order.
15. To the extent that the Final Report has additional recommendations that Prager
Metis has not implemented, within thirty (30) days of issuance of the Final Report, Prager Metis
will certify to the Commission Staff in writing that it has adopted and has implemented or will
implement all additional recommendations of the Independent Consultant (“Final Certification
of Agreement to Adopt Recommendations”). Prager Metis will provide a copy of the Final
Certification of Agreement to Adopt Recommendations to the Commission Staff. To the extent
that Prager Metis has not implemented all additional recommendations contained in the Final
Report by that time, Prager Metis will certify to the Commission Staff in writing, by thirty (30)
days after their implementation, that Prager Metis has adopted and has implemented all
recommendations contained in the Final Report (“Final Implementation Certification”). In all
events, Prager Metis must complete all undertakings concerning the implementation of the
recommendations set forth in the Independent Consultant’s Final Report no later than four (4)
months after the issuance of the Final Report.
16. The Initial Report, Final Report, Certification of Agreement to Adopt
Recommendations, Implementation Certification, Independent Consultant Certification, Final
Certification of Agreement to Adopt Recommendations, and Final Implementation Certification,
and any related correspondence or other documents shall be submitted to Michael Brennan,
Assistant Director, Division of Enforcement, Securities and Exchange Commission, 100 F Street
NE, Washington, DC 20549; and Amy Flaherty Hartman, Assistant Regional Director, Division
of Enforcement, Securities and Exchange Commission, Chicago Regional Office, 175 W.

13

Jackson Blvd, Suite 1450, Chicago, IL 60604; with a copy to the Office of Chief Counsel of the
Enforcement Division, 100 F Street NE, Washington DC, 20549.
17. The Initial Report and Final Report by the Independent Consultant will likely
include confidential financial, proprietary, competitive business or commercial information.
Public disclosure of these reports could discourage cooperation, impede pending or potential
government investigations or undermine the objectives of the reporting requirement. For these
reasons, among others, these reports and the contents thereof are intended to remain and shall
remain non-public, except (1) pursuant to court order, (2) as agreed to by the parties in writing,
(3) to the extent that the Commission determines in its sole discretion that disclosure would be in
furtherance of the Commission’s discharge of its duties and responsibilities, or (4) is otherwise
required by law.
18. No later than sixty (60) days from the date that Prager Metis signs the Final
Implementation Certification, Prager Metis’s Global Managing Partner and Prager Metis’s leader
of quality control policies and procedures shall both certify, in writing, compliance with the
undertakings set forth above. The certification shall identify the undertakings, provide written
evidence of compliance in the form of a narrative, and be supported by exhibits sufficient to
demonstrate compliance. The Commission Staff may make reasonable requests for further
evidence of compliance, and Prager Metis agrees to provide such evidence. This certification and
supporting material shall be submitted to the individuals identified in Paragraph 16 no later than
sixty (60) days from the date of the completion of the undertakings.
19. For good cause shown, and solely at the discretion of the Commission Staff, the
Commission Staff may extend any of the procedural dates relating to the undertakings. Deadlines

14

for procedural dates shall be counted in calendar days, except that if the last day falls on a
weekend or federal holiday, the next business day shall be considered to be the last day.
20. If the Commission Staff believes that Prager Metis has not satisfied these
undertakings, the Commission Staff may petition the Commission to reopen the matter to
determine whether additional sanctions are appropriate.
D. Acceptance of New Audit Clients
21. Between the date of entry of this Order and the date on which Prager Metis
provides a copy of the Certification of Agreement to Adopt Recommendations to the
Commission Staff, and pursuant to the Independent Consultant’s review and approval as
provided in Paragraph 22, Prager Metis shall accept no more than one (1) new audit client (“New
Audit Client”) per quarter.
2
  Quarters shall be calculated starting with the date of entry of this
Order, running in ninety (90) day increments thereafter. To the extent Prager Metis accepts fewer
New Audit Clients than the maximum allowable within a quarter, the number of allowable New
Audit Clients will “rollover” into subsequent quarters. The Independent Consultant shall report
to the Commission Staff on a quarterly basis the New Audit Clients Prager Metis has accepted
and will confirm that the Independent Consultant has approved acceptance of such New Audit
Clients pursuant to the New Audit Client Protocol described in Paragraph 22.
22. Between the date of the entry of this Order and the date on which Prager Metis
provides a copy of the Implementation Certification to the Commission Staff, the Independent
Consultant shall review and approve any New Audit Clients, pursuant to the following:

2
 A New Audit Client is defined as an entity seeking audit services from Prager Metis that is (a) an issuer, as that
term is defined in Section 2(a)(7) of the Sarbanes-Oxley Act of 2002; or (b) is seeking audit services for the purpose
of registering securities with the Commission.

15

a. Prager Metis shall provide the Independent Consultant a minimum of sixty
(60) days to prepare a written protocol for reviewing and approving the New
Audit Clients (“New Audit Client Protocol”). The sixty (60) day period shall
commence on the date upon which the Independent Consultant is formally
retained by Prager Metis. Prager Metis shall require the Independent
Consultant to provide a copy of the New Audit Client Protocol to the
Commission Staff. The Commission Staff shall have ten (10) business days to
communicate whether the New Audit Client Protocol is not unacceptable to
the Commission Staff. The New Audit Client Protocol shall outline, at a
sufficient level of detail, procedures to be performed in connection with the
review of any prospective New Audit Client, including documents and
information to be requested and reviewed, factors to be analyzed, and
discussions, meetings, or interviews to be held, as needed. The New Audit
Client Protocol shall also outline documentation to be created, in connection
with the review of any prospective New Audit Client, which documentation
shall memorialize, at a sufficient level of detail, procedures performed and
conclusions reached in connection with the review of any prospective New
Audit Client (the “New Audit Client Acceptance Documentation”). The New
Audit Client Protocol shall also take into consideration the following factors:
i. whether as of the date the proposed new engagement is considered,
Prager Metis’s policies, procedures, and quality control system, as
known or observed by the Independent Consultant at the time of

16

acceptance, are sufficient for Prager Metis to conduct the engagement
in accordance with all applicable professional standards;
ii. whether the proposed engagement partner, engagement quality
reviewer (“EQR”), and engagement team members at the level of
manager and above possess the requisite competence, experience, and
technical proficiency to conduct the engagement in accordance with
PCAOB auditing standards;
iii. whether the proposed engagement partner, EQR, and engagement team
members have sufficient capacity to complete their respective
responsibilities within the requisite time frame and with professional
competence and in accordance with all applicable professional
standards; and
iv. whether the staffing resources proposed to be dedicated to the
engagement are sufficient to conduct the engagement in accordance
with applicable professional standards.
b. Prager Metis shall require the Independent Consultant to apply the New Audit
Client Protocol to assess and approve any New Audit Clients. New Audit
Client Acceptance Documentation must be completed, in a sufficient level of
detail, in connection with the review of any prospective New Audit Client;
such documentation must also be sufficient to reflect the date upon which the
New Audit Client Protocol procedures were performed, and that such
procedures were performed prior to any formal acceptance of the New Audit
Client by Prager Metis. In the event the Independent Consultant does not

17

approve the acceptance of a New Audit Client, Prager Metis shall not accept
the client.
c. Prager Metis shall maintain all New Audit Client Acceptance Documentation
for a period of seven (7) years, regardless of whether a New Audit Client was
accepted, and shall make such documentation available to Commission Staff
upon request, within five (5) business days of any such request.
E. Other Matters
23. Prager Metis shall require each audit professional to undergo training, as
applicable, related to the areas specified in Paragraph 8 and its subsections above.
24. Prager Metis shall certify, in writing, compliance with the undertakings set forth
above. The certification shall identify the undertakings, provide written evidence of compliance
in the form of a narrative, and be supported by exhibits sufficient to demonstrate compliance.
The Commission staff may make reasonable requests for further evidence of compliance, and
Defendant agrees to provide such evidence. Defendant shall submit the certification and
supporting material to the individuals identified in Paragraph 16 no later than sixty (60) days
from the date of the completion of the undertakings.
25. Defendant waives the entry of findings of fact and conclusions of law pursuant to
Rule 52 of the Federal Rules of Civil Procedure.
26. Defendant waives the right, if any, to a jury trial and to appeal from the entry of
the Final Judgment.
27. Defendant enters into this Consent voluntarily and represents that no threats,
offers, promises, or inducements of any kind have been made by the Commission or any

18

member, officer, employee, agent, or representative of the Commission to induce Defendant to
enter into this Consent.
28. Defendant agrees that this Consent shall be incorporated into the Final Judgment
with the same force and effect as if fully set forth therein.
29. Defendant will not oppose the enforcement of the Final Judgment on the ground,
if any exists, that it fails to comply with Rule 65(d) of the Federal Rules of Civil Procedure, and
hereby waives any objection based thereon.
30. Defendant waives service of the Final Judgment and agrees that entry of the Final
Judgment by the Court and filing with the Clerk of the Court will constitute notice to Defendant
of its terms and conditions. Defendant further agrees to provide counsel for the Commission,
within thirty days after the Final Judgment is filed with the Clerk of the Court, with an affidavit
or declaration stating that Defendant has received and read a copy of the Final Judgment.
31. Consistent with 17 C.F.R. 202.5(f), this Consent resolves only the claims asserted
against Defendant in this civil proceeding. Defendant acknowledges that no promise or
representation has been made by the Commission or any member, officer, employee, agent, or
representative of the Commission with regard to any criminal liability that may have arisen or
may arise from the facts underlying this action or immunity from any such criminal liability.
Defendant waives any claim of Double Jeopardy based upon the settlement of this proceeding,
including the imposition of any remedy or civil penalty herein. Defendant further acknowledges
that the Court’s entry of a permanent injunction may have collateral consequences under federal
or state law and the rules and regulations of self-regulatory organizations, licensing boards, and
other regulatory organizations. Such collateral consequences include, but are not limited to, a
statutory disqualification with respect to membership or participation in, or association with a

19

member of, a self-regulatory organization. This statutory disqualification has consequences that
are separate from any sanction imposed in an administrative proceeding. In addition, in any
disciplinary proceeding before the Commission based on the entry of the injunction in this
action, Defendant understands that it shall not be permitted to contest the factual allegations of
the complaint in this action.
32. Defendant understands and agrees to comply with the terms of 17 C.F.R.
§ 202.5(e), which provides in part that it is the Commission’s policy “not to permit a defendant
or respondent to consent to a judgment or order that imposes a sanction while denying the
allegations in the complaint or order for proceedings,” and “a refusal to admit the allegations is
equivalent to a denial, unless the defendant or respondent states that he neither admits nor denies
the allegations.” As part of Defendant’s agreement to comply with the terms of Section 202.5(e),
Defendant: (i) will not take any action or make or permit to be made any public statement
denying, directly or indirectly, any allegation in the complaint or creating the impression that the
complaint is without factual basis; (ii) will not make or permit to be made any public statement
to the effect that Defendant does not admit the allegations of the complaint, or that this Consent
contains no admission of the allegations, without also stating that Defendant does not deny the
allegations; and (iii) upon the filing of this Consent, Defendant hereby withdraws any papers
filed in this action to the extent that they deny any allegation in the complaint. If Defendant
breaches this agreement, the Commission may petition the Court to vacate the Final Judgment
and restore this action to its active docket. Nothing in this paragraph affects Defendant’s: (i)
testimonial obligations; or (ii) right to take legal or factual positions in litigation or other legal
proceedings in which the Commission is not a party.

20

33. Defendant hereby waives any rights under the Equal Access to Justice Act, the
Small Business Regulatory Enforcement Fairness Act of 1996, or any other provision of law to
seek from the United States, or any agency, or any official of the United States acting in his or
her official capacity, directly or indirectly, reimbursement of attorney’s fees or other fees,
expenses, or costs expended by Defendant to defend against this action. For these purposes,
Defendant agrees that Defendant is not the prevailing party in this action since the parties have
reached a good faith settlement.
34. In connection with this action and any related judicial or administrative
proceeding or investigation commenced by the Commission or to which the Commission is a
party, Defendant (i) agrees to appear and be interviewed by Commission staff at such times and
places as the staff requests upon reasonable notice; (ii) will accept service by mail or facsimile
transmission of notices or subpoenas issued by the Commission for documents or testimony at
depositions, hearings, or trials, or in connection with any related investigation by Commission
staff; (iii) appoints Defendant’s undersigned attorney as agent to receive service of such notices
and subpoenas; (iv) with respect to such notices and subpoenas, waives the territorial limits on
service contained in Rule 45 of the Federal Rules of Civil Procedure and any applicable local
rules, provided that the party requesting the testimony reimburses Defendant's travel, lodging, and
subsistence expenses at the then-prevailing U.S. Government per diem rates; and (v) consents to
personal jurisdiction over Defendant in any United States District Court for purposes of
enforcing any such subpoena.
35. Defendant agrees that the Commission may present the Final Judgment to the
Court for signature and entry without further notice.

UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK 

SECURITIES AND EXCHANGE COMMISSION, 

Plaintiff,
C

v.

Prager Metis CPAs, LLC, 

Defendant.

[PROPOSED] FINAL JUDGMENT AS TO DEFENDANT PRAGER METIS CPAS LLC 

The Securities and Exchange Commission having filed a Complaint and Defendant 

Prager Metis CPAs, LLC (“Prager Metis”) having entered a general appearance; consented to the 

Court’s jurisdiction over Defendant and the subject matter of this action; consented to entry of 

this Final Judgment without admitting or denying the allegations of the Complaint (except as to 

jurisdiction); waived findings of fact and conclusions of law; and waived any right to appeal 

from this Final Judgment: 

I. 

IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is 

permanently restrained and enjoined from violating Sections 17(a)(2) and (3) of the Securities 

Act of 1933 (the “Securities Act”) [15 U.S.C. §§ 77q(a)(2), (3)] in the offer or sale of any 

security by the use of any means or instruments of transportation or communication in interstate 

commerce or by use of the mails, directly or indirectly: 

(a) to obtain money or property by means of any untrue statement of a material fact

or any omission of a material fact necessary in order to make the statements

Case 1:24-cv-07025     Document 4     Filed 09/17/24     Page 1 of 40



2 
 

made, in light of the circumstances under which they were made, not misleading; 

or 

(b) to engage in any transaction, practice, or course of business which operates or 

would operate as a fraud or deceit upon the purchaser. 

 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided in 

Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who 

receive actual notice of this Final Judgment by personal service or otherwise:  (i) Defendant’s 

officers, agents, servants, employees, and attorneys; and (ii) other persons in active concert or 

participation with Defendant or with anyone described in (i). 

II.  

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant shall pay a 

civil penalty in the amount of $745,000 to the Securities and Exchange Commission pursuant to 

Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)].  Defendant shall make this payment 

within 30 days after entry of this Final Judgment. 

Defendant may transmit payment electronically to the Commission, which will provide 

detailed ACH transfer/Fedwire instructions upon request.  Payment may also be made directly 

from a bank account via Pay.gov through the SEC website at 

http://www.sec.gov/about/offices/ofm.htm.  Defendant may also pay by certified check, bank 

cashier’s check, or United States postal money order payable to the Securities and Exchange 

Commission, which shall be delivered or mailed to  

Enterprise Services Center 
Accounts Receivable Branch 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
 

and shall be accompanied by a letter identifying the case title, civil action number, and name of 

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3 
 

this Court; Prager Metis CPAs LLC as a defendant in this action; and specifying that payment is 

made pursuant to this Final Judgment.   

Defendant shall simultaneously transmit photocopies of evidence of payment and case 

identifying information to the Commission’s counsel in this action.  By making this payment, 

Defendant relinquishes all legal and equitable right, title, and interest in such funds and no part 

of the funds shall be returned to Defendant.  The Commission shall send the funds paid pursuant 

to this Final Judgment to the United States Treasury.  

 The Commission may enforce the Court’s judgment for penalties by the use of all 

collection procedures authorized by law, including the Federal Debt Collection Procedures Act, 

28 U.S.C. § 3001 et seq., and moving for civil contempt for the violation of any Court orders 

issued in this action.  Defendant shall pay post-judgment interest on any amounts due after 30 

days of the entry of this Final Judgment pursuant to 28 USC § 1961. 

III.  

 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the Consent of 

Defendant Prager Metis CPAs, LLC is incorporated herein with the same force and effect as if 

fully set forth herein, and that Defendant shall comply with all of the undertakings and 

agreements set forth therein, including, but not limited to, the undertakings to: 

A. Independent Consultant  

1. Retain, within sixty (60) days after the entry of this Order, an independent 

consultant (“Independent Consultant”), not unacceptable to the Commission Staff in the Division 

of Enforcement (“Commission Staff”).  Prager Metis shall provide the Commission Staff with 

notice of possible Independent Consultant candidates no later than thirty (30) days following the 

entry of this Order.  The Commission Staff shall have ten (10) business days to communicate 

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4 
 

whether the Independent Consultant candidates are not unacceptable to the Commission Staff.  

Prager Metis shall, upon request by the Commission Staff, provide information about the 

Independent Consultant’s work plan to the Commission Staff including the Independent 

Consultant’s experience, ability to staff the engagement, and expertise in auditing and audit firm 

quality controls.  Prager Metis shall provide to the Commission Staff a copy of the engagement 

letter detailing the scope of the Independent Consultant’s responsibilities within three (3) months 

after the entry of this Order.  If requested by Commission Staff, Prager Metis shall make the 

Independent Consultant available to Commission Staff to make presentations, provide updates, 

and explain the work, progress, and conclusions.  The Independent Consultant shall have the 

authority to employ legal counsel, consultants, investigators, experts, and other personnel 

necessary to assist in the proper discharge of the Independent Consultant’s duties. The 

Independent Consultant’s compensation and reasonable expenses shall be borne exclusively by 

Prager Metis. 

2. To ensure the independence of the Independent Consultant, Prager Metis:  shall 

not have the authority to terminate the Independent Consultant or substitute another independent 

consultant for the initial Independent Consultant, without the prior written approval of the 

Commission Staff; and shall compensate the Independent Consultant and persons engaged to 

assist the Independent Consultant for services rendered pursuant to this Order at their reasonable 

and customary rates. 

3. Prager Metis will require the Independent Consultant to enter into an agreement 

that provides that, for the period of engagement and for a period of two (2) years after the 

issuance of the Independent’s Consultant’s final report (as defined in Paragraph III.11), the 

Independent Consultant shall not enter into any employment, consultant, attorney-client, auditing 

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5 
 

or other professional relationship with Prager Metis, or any of its present or former affiliates, 

directors, officers, partners, employees, or agents acting in their capacity as such.  The agreement 

will also provide that the Independent Consultant will require that any firm with which he/she is 

affiliated or of which he/she is a member, and any person engaged to assist the Independent 

Consultant in the performance of his/her duties under this Order shall not, without prior written 

consent of the Commission Staff, enter into any employment, consultant, attorney-client, 

auditing or other professional relationship with Prager Metis, or any of its present or former 

affiliates, directors, officers, partners, employees, or agents acting in their capacity as such for 

the period of the engagement and for a period of two (2) years after the issuance of the 

Independent Consultant’s final report (as defined by Paragraph III.11). 

4. With respect to Commission Staff, Prager Metis will not assert any legal privilege 

over communications with or work product prepared by the Independent Consultant. 

B. Scope of Independent Consultant’s Review 

5. Within the time periods specified below, the Independent Consultant will review 

and evaluate Prager Metis’s audit, review, and quality control policies and procedures—as to, 

among other aspects, their sufficiency, adequacy, design, implementation, operation, and 

effectiveness—applicable to Audit Clients1 regarding the subjects set forth below.  The 

Independent Consultant’s purpose for this review and evaluation will be to make 

recommendations for improvements to policies and procedures consistent with applicable 

professional guidance and standards that: 

a. Provide reasonable assurance that personnel comply with applicable 

professional standards and the firm’s standards of quality including: 

 
1 An “Audit Client,” for purposes of these undertakings, means any client of Prager Metis that is an SEC registrant 
or any client for which the audit or review services was required by the federal securities laws.  

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i. That due care, professional judgment, and professional skepticism are 

exercised in the planning and performance of the audit and the 

preparation of the report;  

ii. That engagement partners are properly supervising the work of 

engagement team members for compliance with applicable 

professional standards, including reviewing the work of engagement 

team members to evaluate whether the work was appropriately 

performed and documented and that the results of the work support the 

conclusions reached;  

iii. That auditors are obtaining an understanding of the entity being 

audited and its environment, including (a) relevant industry, 

regulatory, and other external factors, including the applicable 

financial reporting framework; (b) the nature of the entity, its 

operations, and its ownership and governance structures; and (c) the 

entity’s internal control;  

iv. That auditors are identifying and assessing the risks of material 

misstatements in the financial statements, including by identifying 

which risks are significant by considering at least (a) whether the risk 

is a risk of fraud; (b) whether the risk is related to recent significant 

economic, accounting, or other developments; (c) the complexity of 

transactions; and (d) whether the risk involves significant transactions 

with related parties;  

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v. That auditors are developing and modifying, as necessary, an audit 

plan that includes, among other things, the nature and extent of 

planned risk assessment procedures;  

vi. That auditors are planning and performing audit procedures that 

identify, assess, and respond to risks of material misstatement, 

including but not limited to those arising from the entity’s failure to 

appropriately account for or disclose related party relationships, 

transactions, or balances, understanding that the nature of related party 

relationships and transactions may, in some circumstances, give rise to 

higher risks of material misstatement of the financial statements than 

transactions with unrelated parties;  

vii. That auditors are documenting the procedures performed, evidence 

obtained, and conclusions reached, and that audit documentation 

contains sufficient information for an experienced auditor, having no 

previous connection with the engagement to (a) understand the nature, 

timing, extent, and results of the procedures performed to comply with 

applicable professional standards; the results of the audit procedures 

performed, and the audit evidence obtained; and significant findings or 

issues arising during the audit, the conclusions reached thereon, and 

significant professional judgments made in reaching those conclusions, 

and (b) to determine who performed the work and the date such work 

was completed, as well as the person who reviewed the work and the 

date of such review;  

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viii. That a complete and final set of audit documentation is assembled for 

retention as of a date not more than 45 days after the report release 

date (“documentation completion date”) and that documentation 

requirements are also met for unfinished or incomplete engagements;  

ix. That audit documentation is not deleted or discarded after the 

documentation completion date before the end of a specified retention 

period and that any information and documentation added after the 

documentation completion date indicates the date the information was 

added, the name of the person who prepared the additional 

documentation, and the reason for adding it;  

x. That the firm follows its standards of quality and applicable 

professional standards with respect to the selection of engagement 

quality control reviewers; 

xi. That engagement quality reviewers and others who assist the reviewer 

should not make decisions on behalf of the engagement team or 

assume any of the responsibilities of the engagement team;  

xii. That engagement quality review should contain sufficient information 

to enable an experienced auditor, having no previous connection with 

the engagement, to understand the procedures performed by the 

engagement quality reviewer, and others who assisted the reviewer, to 

comply with the provisions of this standard, including information that 

identifies: (a) the documents reviewed by the engagement quality 

reviewer, and others who assisted the reviewer, and (b) the date the 

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engagement quality reviewer provided concurring approval of issuance 

or, if no concurring approval of issuance was provided, the reasons for 

not providing the approval; and 

xiii. That engagement quality review should perform an objective 

evaluation of the significant judgments made by the engagement team 

and the conclusions reached in formulating the auditor's report, 

including (a) discussion of significant findings or issues with the 

engagement; (b) reading the financial statements and the proposed 

auditor's report; (c) review of selected audit documentation relating to 

the significant judgments the engagement team made and the related 

conclusions it reached; and (d) evaluation of the conclusions reached 

in formulating the auditor’s report and consideration of whether the 

proposed auditor's report is appropriate.  

b. Provide the firm with reasonable assurance that the firm’s policies and 

procedures concerning quality control standards are suitably designed 

pursuant to applicable professional standards and are being effectively applied 

and monitored.  

c. Provide the firm with reasonable assurance that the firm is properly 

undertaking or continuing client relationships and engagements only when the 

firm is competent to perform the engagement and has the capabilities, 

including time and resources, to do so.  

d. Provide the firm with reasonable assurance that the firm is assigning 

appropriate personnel, including engagement partners, with the necessary 

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competence and capabilities to perform engagements in accordance with 

professional standards and applicable legal and regulatory requirements, to 

engagement teams.  

e. Provide the firm with reasonable assurance that the firm has a monitoring 

process concerning whether the policies and procedures relating to its system 

of quality control are relevant, adequate, and operating effectively. 

f. Provide the firm with reasonable assurance that its public audit practice leader 

is appropriate to lead that practice, including whether he has a proven ability 

to follow firm standards of quality and applicable professional standards. 

g. Provide the firm with reasonable assurance that the firm’s policies and 

procedures relating to auditor independence are suitably designed pursuant to 

applicable professional standards and are being effectively applied. 

6. Prager Metis shall cooperate fully with the Independent Consultant and shall 

provide reasonable and timely access to any Prager Metis partner, employee, agent, or 

consultant, and to any information and records (including audit and consultation documents), as 

the Independent Consultant may reasonably request for the Independent Consultant’s review and 

evaluation described in Paragraph III.5 above and the reports specified in Paragraphs III.7 

through III.12 below.  

C. Independent Consultant Reports and Certifications 

7. Within eight (8) months after the entry of this Order, Prager Metis shall require 

the Independent Consultant to issue a detailed written report (“Initial Report”) to Prager Metis: 

(i) describing the Independent Consultant’s review and evaluation of each of the areas identified 

in Paragraph III.5. and its subsections above; and (ii) making recommendations, where 

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appropriate, reasonably designed to ensure that audits conducted by Prager Metis comply with 

applicable professional standards and any applicable federal securities laws.  Prager Metis shall 

require the Independent Consultant to provide a copy of the Initial Report to the Commission 

Staff when the Initial Report is issued.  Prager Metis shall also make the Independent Consultant 

available to Commission Staff to discuss its work both periodically and after issuance of the 

Initial Report. 

8. Prager Metis will adopt and implement, as soon as practicably possible, but in any 

event no later than two (2) years after the entry of this Order, and in compliance with the 

requirements set forth in Paragraphs III.10 through III.15 below, all recommendations of the 

Independent Consultant in the Initial Report.  Provided, however, that within thirty (30) days of 

issuance of the Initial Report, Prager Metis may advise the Independent Consultant in writing of 

any recommendation that it considers to be unnecessary, unjust, outside the scope of this Order, 

unduly burdensome, or impractical.  Prager Metis need not adopt any such unnecessary, unjust, 

outside the scope of this Order, unduly burdensome, or impractical recommendation at that time, 

but instead may propose in writing to the Independent Consultant an alternative recommendation 

(an “Alternative Recommendation”) designed to achieve the same objective or purpose.  Prager 

Metis will provide any such Alternative Recommendation(s) to the Commission Staff at the 

same time that Prager Metis submits such Alternative Recommendation(s) to the Independent 

Consultant.  Prager Metis and the Independent Consultant shall engage in good faith negotiations 

in an effort to reach agreement on any recommendations objected to by Prager Metis.   

9. In the event that the Independent Consultant and Prager Metis are unable to agree 

on any Alternative Recommendation(s) within sixty (60) days of the issuance of the Initial 

Report, Prager Metis shall abide by the determinations of the Independent Consultant.   

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10. Within sixty (60) days of issuance of the Initial Report, Prager Metis will certify 

to the Commission Staff in writing that (i) Prager Metis has adopted and has implemented or will 

implement all recommendations of the Independent Consultant; and (ii) the Independent 

Consultant agrees that Prager Metis has adopted, implemented, and/or has a plan for 

implementation (the “Certification of Agreement to Adopt Recommendations”).  Prager 

Metis will provide a copy of the Certification of Agreement to Adopt Recommendations to the 

Commission Staff.  To the extent that Prager Metis has not implemented all recommendations 

contained in the Initial Report by that time, Prager Metis will certify to the Commission Staff in 

writing, no later than thirty (30) days after their implementation, that (i) Prager Metis has 

adopted and has implemented all recommendations contained in the Initial Report; and (ii) the 

Independent Consultant agrees that the recommendations have been adequately adopted and 

implemented by Prager Metis (“Implementation Certification”).  

11. Within six (6) months of the issuance of the Initial Report or the Implementation 

Certification, whichever is later, Prager Metis shall require the Independent Consultant to 

complete testing to assess (i) whether Prager Metis has implemented the written policies and 

procedures concerning the areas specified in Paragraph III.5 and its subsections above and (ii) 

the effectiveness of the design and implementation of those policies and procedures.  At least 

thirty (30) days prior to beginning the testing, Prager Metis shall provide to the Commission 

Staff a copy of the scope and parameters for testing.  The Commission Staff shall have ten (10) 

days to provide comments.  Within thirty (30) days of the completion of this testing, Prager 

Metis shall require the Independent Consultant to issue a written report summarizing the results 

of the Independent Consultant’s testing and assessment, and if applicable, any recommendations 

(“Final Report”) and to provide a copy of the Final Report to the Commission Staff.  At this 

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time, if the Independent Consultant determines that Prager Metis has adopted and implemented 

all recommendations set forth in the Initial Report and that Prager Metis’s quality control 

policies addressing those recommendations and the policies specified in Paragraph III.5 and its 

subsections are functioning effectively, Prager Metis shall require the Independent Consultant to 

certify in writing that Prager Metis has satisfied such undertakings (“Independent Consultant 

Certification”) and provide a copy of this certification to the Commission Staff.  In all events, 

Prager Metis must complete all undertakings concerning the implementation of the 

recommendations set forth in the Independent Consultant’s Initial Report, and any amended 

recommendations, and provide the Independent Consultant Certification to the Commission Staff 

no later than two (2) years after the entry of this Order. 

12. To the extent that the Final Report has additional recommendations that Prager 

Metis has not implemented, within thirty (30) days of issuance of the Final Report, Prager Metis 

will certify to the Commission Staff in writing that it has adopted and has implemented or will 

implement all additional recommendations of the Independent Consultant (“Final Certification 

of Agreement to Adopt Recommendations”).  Prager Metis will provide a copy of the Final 

Certification of Agreement to Adopt Recommendations to the Commission Staff.  To the extent 

that Prager Metis has not implemented all additional recommendations contained in the Final 

Report by that time, Prager Metis will certify to the Commission Staff in writing, by thirty (30) 

days after their implementation, that Prager Metis has adopted and has implemented all 

recommendations contained in the Final Report (“Final Implementation Certification”).  In all 

events, Prager Metis must complete all undertakings concerning the implementation of the 

recommendations set forth in the Independent Consultant’s Final Report no later than four (4) 

months after the issuance of the Final Report. 

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13. The Initial Report, Final Report, Certification of Agreement to Adopt 

Recommendations, Implementation Certification, Independent Consultant Certification, Final 

Certification of Agreement to Adopt Recommendations, and Final Implementation Certification, 

and any related correspondence or other documents shall be submitted to Michael Brennan, 

Assistant Director, Division of Enforcement, Securities and Exchange Commission, 100 F Street 

NE, Washington, DC 20549; and Amy Flaherty Hartman, Assistant Regional Director, Division 

of Enforcement, Securities and Exchange Commission, Chicago Regional Office, 175 W. 

Jackson Blvd, Suite 1450, Chicago, IL 60604; with a copy to the Office of Chief Counsel of the 

Enforcement Division, 100 F Street NE, Washington DC, 20549. 

14. The Initial Report and Final Report by the Independent Consultant will likely 

include confidential financial, proprietary, competitive business or commercial information.  

Public disclosure of these reports could discourage cooperation, impede pending or potential 

government investigations or undermine the objectives of the reporting requirement.  For these 

reasons, among others, these reports and the contents thereof are intended to remain and shall 

remain non-public, except (i) pursuant to court order, (ii) as agreed to by the parties in writing, 

(iii) to the extent that the Commission determines in its sole discretion that disclosure would be 

in furtherance of the Commission’s discharge of its duties and responsibilities, or (iv) is 

otherwise required by law. 

15. No later than sixty (60) days from the date that Prager Metis signs the Final 

Implementation Certification, Prager Metis’s Global Managing Partner and Prager Metis’s leader 

of quality control policies and procedures shall both certify, in writing, compliance with the 

undertakings set forth above.  The certification shall identify the undertakings, provide written 

evidence of compliance in the form of a narrative, and be supported by exhibits sufficient to 

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15 
 

demonstrate compliance.  The Commission Staff may make reasonable requests for further 

evidence of compliance, and Prager Metis agrees to provide such evidence.  This certification 

and supporting material shall be submitted to the individuals identified in Paragraph III.13 no 

later than sixty (60) days from the date of the completion of the undertakings. 

16. For good cause shown, and solely at the discretion of the Commission Staff, the 

Commission Staff may extend any of the procedural dates relating to the undertakings.  

Deadlines for procedural dates shall be counted in calendar days, except that if the last day falls 

on a weekend or federal holiday, the next business day shall be considered to be the last day. 

17. If the Commission Staff believes that Prager Metis has not satisfied these 

undertakings, the Commission Staff may petition the Commission to reopen the matter to 

determine whether additional sanctions are appropriate. 

D. Acceptance of New Audit Clients 

18. Between the date of entry of this Order and the date on which Prager Metis 

provides a copy of the Certification of Agreement to Adopt Recommendations to the 

Commission Staff, and pursuant to the Independent Consultant’s review and approval as 

provided in Paragraph III.19.a, Prager Metis shall accept no more than one (1) new audit client 

(“New Audit Client”) per quarter.2  Quarters shall be calculated starting with the date of entry of 

this Order, running in ninety (90) day increments thereafter. To the extent Prager Metis accepts 

fewer New Audit Clients than the maximum allowable within a quarter, the number of allowable 

New Audit Clients will “rollover” into subsequent quarters. The Independent Consultant shall 

report to the Commission Staff on a quarterly basis the New Audit Clients Prager Metis has 

 
2 A New Audit Client is defined as an entity seeking audit services from Prager Metis that is (a) an issuer, as that 
term is defined in Section 2(a)(7) of the Sarbanes-Oxley Act of 2002; or (b) is seeking audit services for the purpose 
of registering securities with the Commission. 

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accepted and will confirm that the Independent Consultant has approved acceptance of such New 

Audit Clients pursuant to the New Audit Client Protocol described in Paragraph III.19.a. 

19. Between the date of the entry of this Order and the date on which Prager Metis 

provides a copy of the Implementation Certification to the Commission Staff, the Independent 

Consultant shall review and approve any New Audit Clients, pursuant to the following:  

a. Prager Metis shall provide the Independent Consultant a minimum of sixty (60) 

days to prepare a written protocol for reviewing and approving the New Audit 

Clients (“New Audit Client Protocol”). The sixty (60) day period shall commence 

on the date upon which the Independent Consultant is formally retained by Prager 

Metis. Prager Metis shall require the Independent Consultant to provide a copy of 

the New Audit Client Protocol to the Commission Staff. The Commission Staff 

shall have ten (10) business days to communicate whether the New Audit Client 

Protocol is not unacceptable to the Commission Staff. The New Audit Client 

Protocol shall outline, at a sufficient level of detail, procedures to be performed in 

connection with the review of any prospective New Audit Client, including 

documents and information to be requested and reviewed, factors to be analyzed, 

and discussions, meetings, or interviews to be held, as needed. The New Audit 

Client Protocol shall also outline documentation to be created, in connection with 

the review of any prospective New Audit Client, which documentation shall 

memorialize, at a sufficient level of detail, procedures performed and conclusions 

reached in connection with the review of any prospective New Audit Client (the 

“New Audit Client Acceptance Documentation”). The New Audit Client Protocol 

shall also take into consideration the following factors: 

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17 
 

i. whether as of the date the proposed new engagement is considered, Prager 

Metis’s policies, procedures, and quality control system, as known or 

observed by the Independent Consultant at the time of acceptance, are 

sufficient for Prager Metis to conduct the engagement in accordance with 

all applicable professional standards; 

ii. whether the proposed engagement partner, engagement quality reviewer 

(“EQR”), and engagement team members at the level of manager and 

above possess the requisite competence, experience, and technical 

proficiency to conduct the engagement in accordance with PCAOB 

auditing standards; 

iii. whether the proposed engagement partner, EQR, and engagement team 

members have sufficient capacity to complete their respective 

responsibilities within the requisite time frame and with professional 

competence and in accordance with all applicable professional standards; 

and 

iv. whether the staffing resources proposed to be dedicated to the engagement 

are sufficient to conduct the engagement in accordance with applicable 

professional standards. 

b. Prager Metis shall require the Independent Consultant to apply the New Audit 

Client Protocol to assess and approve any New Audit Clients. New Audit Client 

Acceptance Documentation must be completed, in a sufficient level of detail, in 

connection with the review of any prospective New Audit Client; such 

documentation must also be sufficient to reflect the date upon which the New 

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18 
 

Audit Client Protocol procedures were performed, and that such procedures were 

performed prior to any formal acceptance of the New Audit Client by Prager 

Metis. In the event the Independent Consultant does not approve the acceptance 

of a New Audit Client, Prager Metis shall not accept the client. 

c. Prager Metis shall maintain all New Audit Client Acceptance Documentation for 

a period of seven (7) years, regardless of whether a New Audit Client was 

accepted, and shall make such documentation available to Commission Staff upon 

request, within five (5) business days of any such request. 

E. Other Matters  

20. Prager Metis shall require each audit professional to undergo training, as 

applicable, related to the areas specified in Paragraph III.5 and its subsections above. 

21. Prager Metis shall certify, in writing, compliance with the undertakings set forth 

above.  The certification shall identify the undertakings, provide written evidence of compliance 

in the form of a narrative, and be supported by exhibits sufficient to demonstrate compliance.  

The Commission staff may make reasonable requests for further evidence of compliance, and 

Defendant agrees to provide such evidence.  Defendant shall submit the certification and 

supporting material to the individuals identified in Paragraph III.13 no later than sixty (60) days 

from the date of the completion of the undertakings. 

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IV.  

 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court shall retain 

jurisdiction of this matter for the purposes of enforcing the terms of this Final Judgment. 

 

 
Dated:  ______________, 2024 

________________________________ 
UNITED STATES DISTRICT JUDGE 

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UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK 

 
 
  
SECURITIES AND EXCHANGE COMMISSION,  
  

Plaintiff,  
 C.A. No. __-____ (     ) 

v.  
  
Prager Metis CPAs, LLC,  
  

Defendant.  
  

 
 

CONSENT OF DEFENDANT PRAGER METIS CPAS LLC 
 

1. Defendant Prager Metis CPAs, LLC (“Defendant” or “Prager Metis”) waives 

service of a summons and the complaint in this action, enters a general appearance, and admits 

the Court’s jurisdiction over Defendant and over the subject matter of this action. 

2. Without admitting or denying the allegations of the complaint (except as provided 

herein in Paragraph 32 and except as to personal and subject matter jurisdiction, which 

Defendant admits), Defendant hereby consents to the entry of the final Judgment in the form 

attached hereto (the “Final Judgment”) and incorporated by reference herein, which, among other 

things: 

a. permanently restrains and enjoins Defendant from violation of Sections 

17(a)(2) and (a)(3) of the Securities Act of 1933 (the “Securities Act”) [15 U.S.C. §§ 77q(a)(2) 

and (a)(3)] as set forth in the Final Judgment;  

b. orders Defendant to pay a civil penalty in the amount of $745,000 under 

Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)]; and  

c. comply with the undertakings set forth herein and in the Final Judgment. 

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3. Defendant agrees that it shall not seek or accept, directly or indirectly, 

reimbursement or indemnification from any source, including but not limited to payment made 

pursuant to any insurance policy, with regard to any civil penalty amounts that Defendant pays 

pursuant to the Final Judgment, regardless of whether such penalty amounts or any part thereof 

are added to a distribution fund or otherwise used for the benefit of investors. Defendant further 

agrees that it shall not claim, assert, or apply for a tax deduction or tax credit with regard to any 

federal, state, or local tax for any penalty amounts that Defendant pays pursuant to the Final 

Judgment, regardless of whether such penalty amounts or any part thereof are added to a 

distribution fund or otherwise used for the benefit of investors.  

A. Independent Consultant  

4. Defendant undertakes to Retain, within sixty (60) days after the entry of this 

Order, an independent consultant (“Independent Consultant”), not unacceptable to the 

Commission Staff in the Division of Enforcement (“Commission Staff”). Prager shall provide 

the Commission Staff with notice of possible Independent Consultant candidates no later than 

thirty (30) days following the entry of this Order. The Commission Staff shall have ten (10) 

business days to communicate whether the Independent Consultant candidates are not 

unacceptable to the Commission Staff. Prager Metis shall, upon request by the Commission 

Staff, provide information about the Independent Consultant’s work plan to the Commission 

Staff including the Independent Consultant’s experience, ability to staff the engagement, and 

expertise in auditing and audit firm quality controls. Prager Metis shall provide to the 

Commission Staff a copy of the engagement letter detailing the scope of the Independent 

Consultant’s responsibilities within three (3) months after the entry of this Order. If requested by 

Commission Staff, Prager Metis shall make the Independent Consultant available to Commission 

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3 
 

Staff to make presentations, provide updates, and explain the work, progress, and conclusions. 

The Independent Consultant shall have the authority to employ legal counsel, consultants, 

investigators, experts, and other personnel necessary to assist in the proper discharge of the 

Independent Consultant’s duties. The Independent Consultant’s compensation and reasonable 

expenses shall be borne exclusively by Prager Metis. 

5. To ensure the independence of the Independent Consultant, Prager Metis: shall 

not have the authority to terminate the Independent Consultant or substitute another independent 

consultant for the initial Independent Consultant, without the prior written approval of the 

Commission Staff; and shall compensate the Independent Consultant and persons engaged to 

assist the Independent Consultant for services rendered pursuant to this Order at their reasonable 

and customary rates. 

6. Prager Metis will require the Independent Consultant to enter into an agreement 

that provides that, for the period of engagement and for a period of two (2) years after the 

issuance of the Independent’s Consultant’s final report (as defined in Paragraph 14), the 

Independent Consultant shall not enter into any employment, consultant, attorney-client, auditing 

or other professional relationship with Prager Metis, or any of its present or former affiliates, 

directors, officers, partners, employees, or agents acting in their capacity as such. The agreement 

will also provide that the Independent Consultant will require that any firm with which he/she is 

affiliated or of which he/she is a member, and any person engaged to assist the Independent 

Consultant in the performance of his/her duties under this Order shall not, without prior written 

consent of the Commission Staff, enter into any employment, consultant, attorney-client, 

auditing or other professional relationship with Prager Metis, or any of its present or former 

affiliates, directors, officers, partners, employees, or agents acting in their capacity as such for 

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the period of the engagement and for a period of two (2) years after the issuance of the 

Independent Consultant’s final report (as defined by Paragraph 14). 

7. With respect to Commission Staff, Prager Metis will not assert any legal privilege 

over communications with or work product prepared by the Independent Consultant. 

B. Scope of Independent Consultant’s Review 

8. Within the time periods specified below, the Independent Consultant will review 

and evaluate Prager Metis’s audit, review, and quality control policies and procedures—as to, 

among other aspects, their sufficiency, adequacy, design, implementation, operation, and 

effectiveness—applicable to Audit Clients1 regarding the subjects set forth below. The 

Independent Consultant’s purpose for this review and evaluation will be to make 

recommendations for improvements to policies and procedures consistent with applicable 

professional guidance and standards that: 

a. Provide reasonable assurance that personnel comply with applicable 

professional standards and the firm’s standards of quality including: 

i. That due care, professional judgment, and professional skepticism are 

exercised in the planning and performance of the audit and the 

preparation of the report;  

ii. That engagement partners are properly supervising the work of 

engagement team members for compliance with applicable 

professional standards, including reviewing the work of engagement 

team members to evaluate whether the work was appropriately 

 
1 An “Audit Client,” for purposes of these undertakings, means any client of Prager Metis that is an SEC registrant 
or any client for which the audit or review services is required by the federal securities laws.  

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performed and documented and that the results of the work support the 

conclusions reached;  

iii. That auditors are obtaining an understanding of the entity being 

audited and its environment, including (a) relevant industry, 

regulatory, and other external factors, including the applicable 

financial reporting framework; (b) the nature of the entity, its 

operations, and its ownership and governance structures; and (c) the 

entity’s internal control;  

iv. That auditors are identifying and assessing the risks of material 

misstatements in the financial statements, including by identifying 

which risks are significant by considering at least (a) whether the risk 

is a risk of fraud; (b) whether the risk is related to recent significant 

economic, accounting, or other developments; (c) the complexity of 

transactions; and (d) whether the risk involves significant transactions 

with related parties;  

v. That auditors are developing and modifying, as necessary, an audit 

plan that includes, among other things, the nature and extent of 

planned risk assessment procedures;  

vi. That auditors are planning and performing audit procedures that 

identify, assess, and respond to risks of material misstatement, 

including but not limited to those arising from the entity’s failure to 

appropriately account for or disclose related party relationships, 

transactions, or balances, understanding that the nature of related party 

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relationships and transactions may, in some circumstances, give rise to 

higher risks of material misstatement of the financial statements than 

transactions with unrelated parties;  

vii. That auditors are documenting the procedures performed, evidence 

obtained, and conclusions reached, and that audit documentation 

contains sufficient information for an experienced auditor, having no 

previous connection with the engagement to (a) understand the nature, 

timing, extent, and results of the procedures performed to comply with 

applicable professional standards; the results of the audit procedures 

performed, and the audit evidence obtained; and significant findings or 

issues arising during the audit, the conclusions reached thereon, and 

significant professional judgments made in reaching those conclusions, 

and (b) to determine who performed the work and the date such work 

was completed, as well as the person who reviewed the work and the 

date of such review;  

viii. That a complete and final set of audit documentation is assembled for 

retention as of a date not more than 45 days after the report release 

date (“documentation completion date”) and that documentation 

requirements are also met for unfinished or incomplete engagements;  

ix. That audit documentation is not deleted or discarded after the 

documentation completion date before the end of a specified retention 

period and that any information and documentation added after the 

documentation completion date indicates the date the information was 

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added, the name of the person who prepared the additional 

documentation, and the reason for adding it;  

x. That the firm follows its standards of quality and applicable 

professional standards with respect to the selection of engagement 

quality control reviewers; 

xi. That engagement quality reviewers and others who assist the reviewer 

should not make decisions on behalf of the engagement team or 

assume any of the responsibilities of the engagement team;  

xii. That engagement quality review should contain sufficient information 

to enable an experienced auditor, having no previous connection with 

the engagement, to understand the procedures performed by the 

engagement quality reviewer, and others who assisted the reviewer, to 

comply with the provisions of this standard, including information that 

identifies (a) the documents reviewed by the engagement quality 

reviewer, and others who assisted the reviewer, and (b) the date the 

engagement quality reviewer provided concurring approval of issuance 

or, if no concurring approval of issuance was provided, the reasons for 

not providing the approval; and 

xiii. That engagement quality review should perform an objective 

evaluation of the significant judgments made by the engagement team 

and the conclusions reached in formulating the auditor’s report, 

including (a) discussion of significant findings or issues with the 

engagement; (b) reading the financial statements and the proposed 

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auditor's report; (c) review of selected audit documentation relating to 

the significant judgments the engagement team made and the related 

conclusions it reached; and (d) evaluation of the conclusions reached 

in formulating the auditor’s report and consideration of whether the 

proposed auditor's report is appropriate.  

b. Provide the firm with reasonable assurance that the firm’s policies and 

procedures concerning quality control standards are suitably designed 

pursuant to applicable professional standards and are being effectively applied 

and monitored.  

c. Provide the firm with reasonable assurance that the firm is properly 

undertaking or continuing client relationships and engagements only when the 

firm is competent to perform the engagement and has the capabilities, 

including time and resources, to do so.  

d. Provide the firm with reasonable assurance that the firm is assigning 

appropriate personnel, including engagement partners, with the necessary 

competence and capabilities to perform engagements in accordance with 

professional standards and applicable legal and regulatory requirements, to 

engagement teams.  

e. Provide the firm with reasonable assurance that the firm has a monitoring 

process concerning whether the policies and procedures relating to its system 

of quality control are relevant, adequate, and operating effectively. 

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f. Provide the firm with reasonable assurance that its public audit practice leader 

is appropriate to lead that practice, including whether he has a proven ability 

to follow firm standards of quality and applicable professional standards. 

g. Provide the firm with reasonable assurance that the firm’s policies and 

procedures relating to auditor independence are suitably designed pursuant to 

applicable professional standards and are being effectively applied. 

9. Prager shall cooperate fully with the Independent Consultant and shall provide 

reasonable and timely access to any Prager Metis partner, employee, agent, or consultant, and to 

any information and records (including audit and consultation documents), as the Independent 

Consultant may reasonably request for the Independent Consultant’s review and evaluation 

described in Paragraph 8 above and the reports specified in Paragraphs 10 through 15 below.  

C. Independent Consultant Reports and Certifications 

10. Within eight (8) months after the entry of this Order, Prager Metis shall require 

the Independent Consultant to issue a detailed written report (“Initial Report”) to Prager Metis: 

(i) describing the Independent Consultant’s review and evaluation of each of the areas identified 

in Paragraph 8 and its subsections above; and (ii) making recommendations, where appropriate, 

reasonably designed to ensure that audits conducted by Prager Metis comply with applicable 

professional standards and any applicable federal securities laws. Prager Metis shall require the 

Independent Consultant to provide a copy of the Initial Report to the Commission Staff when the 

Initial Report is issued. Prager Metis shall also make the Independent Consultant available to 

Commission Staff to discuss its work both periodically and after issuance of the Initial Report. 

11. Prager Metis will adopt and implement, as soon as practicably possible, but in any 

event no later than two (2) years after the entry of this Order, and in compliance with the 

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requirements set forth in Paragraphs 13-18 below, all recommendations of the Independent 

Consultant in the Initial Report. Provided, however, that within thirty (30) days of issuance of the 

Initial Report, Prager Metis may advise the Independent Consultant in writing of any 

recommendation that it considers to be unnecessary, unjust, outside the scope of this Order, 

unduly burdensome, or impractical. Prager Metis need not adopt any such unnecessary, unjust, 

outside the scope of this Order, unduly burdensome, or impractical recommendation at that time, 

but instead may propose in writing to the Independent Consultant an alternative recommendation 

(an “Alternative Recommendation”) designed to achieve the same objective or purpose. Prager 

Metis will provide any such Alternative Recommendation(s) to the Commission Staff at the 

same time that Prager Metis submits such Alternative Recommendation(s) to the Independent 

Consultant. Prager Metis and the Independent Consultant shall engage in good faith negotiations 

in an effort to reach agreement on any recommendations objected to by Prager Metis.  

12. In the event that the Independent Consultant and Prager Metis are unable to agree 

on any Alternative Recommendation(s) within sixty (60) days of the issuance of the Initial 

Report, Prager Metis shall abide by the determinations of the Independent Consultant.   

13. Within sixty (60) days of issuance of the Initial Report, Prager Metis will certify 

to the Commission Staff in writing that (i) Prager Metis has adopted and has implemented or will 

implement all recommendations of the Independent Consultant; and (ii) the Independent 

Consultant agrees that Prager Metis has adopted, implemented, and/or has a plan for 

implementation (the “Certification of Agreement to Adopt Recommendations”). Prager Metis 

will provide a copy of the Certification of Agreement to Adopt Recommendations to the 

Commission Staff. To the extent that Prager Metis has not implemented all recommendations 

contained in the Initial Report by that time, Prager Metis will certify to the Commission Staff in 

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writing, no later than thirty (30) days after their implementation, that (i) Prager Metis has 

adopted and has implemented all recommendations contained in the Initial Report; and (ii) the 

Independent Consultant agrees that the recommendations have been adequately adopted and 

implemented by Prager Metis (“Implementation Certification”).  

14. Within six (6) months of the issuance of the Initial Report or the Implementation 

Certification, whichever is later, Prager Metis shall require the Independent Consultant to 

complete testing to assess (i) whether Prager Metis has implemented the written policies and 

procedures concerning the areas specified in Paragraph 8 and its subsections above and (ii) the 

effectiveness of the design and implementation of those policies and procedures. At least thirty 

(30) days prior to beginning the testing, Prager Metis shall provide to the Commission Staff a 

copy of the scope and parameters for testing. The Commission Staff shall have ten (10) days to 

provide comments. Within thirty (30) days of the completion of this testing, Prager Metis shall 

require the Independent Consultant to issue a written report summarizing the results of the 

Independent Consultant’s testing and assessment, and if applicable, any recommendations 

(“Final Report”) and to provide a copy of the Final Report to the Commission Staff. At this 

time, if the Independent Consultant determines that Prager Metis has adopted and implemented 

all recommendations set forth in the Initial Report and that Prager Metis’s quality control 

policies addressing those recommendations and the policies specified in Paragraph 8 and its 

subsections are functioning effectively, Prager Metis shall require the Independent Consultant to 

certify in writing that Prager Metis has satisfied such undertakings (“Independent Consultant 

Certification”) and provide a copy of this certification to the Commission Staff. In all events, 

Prager Metis must complete all undertakings concerning the implementation of the 

recommendations set forth in the Independent Consultant’s Initial Report, and any amended 

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recommendations, and provide the Independent Consultant Certification to the Commission Staff 

no later than two (2) years after the entry of this Order. 

15. To the extent that the Final Report has additional recommendations that Prager 

Metis has not implemented, within thirty (30) days of issuance of the Final Report, Prager Metis 

will certify to the Commission Staff in writing that it has adopted and has implemented or will 

implement all additional recommendations of the Independent Consultant (“Final Certification 

of Agreement to Adopt Recommendations”). Prager Metis will provide a copy of the Final 

Certification of Agreement to Adopt Recommendations to the Commission Staff. To the extent 

that Prager Metis has not implemented all additional recommendations contained in the Final 

Report by that time, Prager Metis will certify to the Commission Staff in writing, by thirty (30) 

days after their implementation, that Prager Metis has adopted and has implemented all 

recommendations contained in the Final Report (“Final Implementation Certification”). In all 

events, Prager Metis must complete all undertakings concerning the implementation of the 

recommendations set forth in the Independent Consultant’s Final Report no later than four (4) 

months after the issuance of the Final Report. 

16. The Initial Report, Final Report, Certification of Agreement to Adopt 

Recommendations, Implementation Certification, Independent Consultant Certification, Final 

Certification of Agreement to Adopt Recommendations, and Final Implementation Certification, 

and any related correspondence or other documents shall be submitted to Michael Brennan, 

Assistant Director, Division of Enforcement, Securities and Exchange Commission, 100 F Street 

NE, Washington, DC 20549; and Amy Flaherty Hartman, Assistant Regional Director, Division 

of Enforcement, Securities and Exchange Commission, Chicago Regional Office, 175 W. 

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Jackson Blvd, Suite 1450, Chicago, IL 60604; with a copy to the Office of Chief Counsel of the 

Enforcement Division, 100 F Street NE, Washington DC, 20549. 

17. The Initial Report and Final Report by the Independent Consultant will likely 

include confidential financial, proprietary, competitive business or commercial information. 

Public disclosure of these reports could discourage cooperation, impede pending or potential 

government investigations or undermine the objectives of the reporting requirement. For these 

reasons, among others, these reports and the contents thereof are intended to remain and shall 

remain non-public, except (1) pursuant to court order, (2) as agreed to by the parties in writing, 

(3) to the extent that the Commission determines in its sole discretion that disclosure would be in 

furtherance of the Commission’s discharge of its duties and responsibilities, or (4) is otherwise 

required by law. 

18. No later than sixty (60) days from the date that Prager Metis signs the Final 

Implementation Certification, Prager Metis’s Global Managing Partner and Prager Metis’s leader 

of quality control policies and procedures shall both certify, in writing, compliance with the 

undertakings set forth above. The certification shall identify the undertakings, provide written 

evidence of compliance in the form of a narrative, and be supported by exhibits sufficient to 

demonstrate compliance. The Commission Staff may make reasonable requests for further 

evidence of compliance, and Prager Metis agrees to provide such evidence. This certification and 

supporting material shall be submitted to the individuals identified in Paragraph 16 no later than 

sixty (60) days from the date of the completion of the undertakings. 

19. For good cause shown, and solely at the discretion of the Commission Staff, the 

Commission Staff may extend any of the procedural dates relating to the undertakings. Deadlines 

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for procedural dates shall be counted in calendar days, except that if the last day falls on a 

weekend or federal holiday, the next business day shall be considered to be the last day. 

20. If the Commission Staff believes that Prager Metis has not satisfied these 

undertakings, the Commission Staff may petition the Commission to reopen the matter to 

determine whether additional sanctions are appropriate. 

D. Acceptance of New Audit Clients 

21. Between the date of entry of this Order and the date on which Prager Metis 

provides a copy of the Certification of Agreement to Adopt Recommendations to the 

Commission Staff, and pursuant to the Independent Consultant’s review and approval as 

provided in Paragraph 22, Prager Metis shall accept no more than one (1) new audit client (“New 

Audit Client”) per quarter.2  Quarters shall be calculated starting with the date of entry of this 

Order, running in ninety (90) day increments thereafter. To the extent Prager Metis accepts fewer 

New Audit Clients than the maximum allowable within a quarter, the number of allowable New 

Audit Clients will “rollover” into subsequent quarters. The Independent Consultant shall report 

to the Commission Staff on a quarterly basis the New Audit Clients Prager Metis has accepted 

and will confirm that the Independent Consultant has approved acceptance of such New Audit 

Clients pursuant to the New Audit Client Protocol described in Paragraph 22. 

22. Between the date of the entry of this Order and the date on which Prager Metis 

provides a copy of the Implementation Certification to the Commission Staff, the Independent 

Consultant shall review and approve any New Audit Clients, pursuant to the following: 

 
2 A New Audit Client is defined as an entity seeking audit services from Prager Metis that is (a) an issuer, as that 
term is defined in Section 2(a)(7) of the Sarbanes-Oxley Act of 2002; or (b) is seeking audit services for the purpose 
of registering securities with the Commission. 

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a. Prager Metis shall provide the Independent Consultant a minimum of sixty 

(60) days to prepare a written protocol for reviewing and approving the New 

Audit Clients (“New Audit Client Protocol”). The sixty (60) day period shall 

commence on the date upon which the Independent Consultant is formally 

retained by Prager Metis. Prager Metis shall require the Independent 

Consultant to provide a copy of the New Audit Client Protocol to the 

Commission Staff. The Commission Staff shall have ten (10) business days to 

communicate whether the New Audit Client Protocol is not unacceptable to 

the Commission Staff. The New Audit Client Protocol shall outline, at a 

sufficient level of detail, procedures to be performed in connection with the 

review of any prospective New Audit Client, including documents and 

information to be requested and reviewed, factors to be analyzed, and 

discussions, meetings, or interviews to be held, as needed. The New Audit 

Client Protocol shall also outline documentation to be created, in connection 

with the review of any prospective New Audit Client, which documentation 

shall memorialize, at a sufficient level of detail, procedures performed and 

conclusions reached in connection with the review of any prospective New 

Audit Client (the “New Audit Client Acceptance Documentation”). The New 

Audit Client Protocol shall also take into consideration the following factors: 

i. whether as of the date the proposed new engagement is considered, 

Prager Metis’s policies, procedures, and quality control system, as 

known or observed by the Independent Consultant at the time of 

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acceptance, are sufficient for Prager Metis to conduct the engagement 

in accordance with all applicable professional standards; 

ii. whether the proposed engagement partner, engagement quality 

reviewer (“EQR”), and engagement team members at the level of 

manager and above possess the requisite competence, experience, and 

technical proficiency to conduct the engagement in accordance with 

PCAOB auditing standards; 

iii. whether the proposed engagement partner, EQR, and engagement team 

members have sufficient capacity to complete their respective 

responsibilities within the requisite time frame and with professional 

competence and in accordance with all applicable professional 

standards; and 

iv. whether the staffing resources proposed to be dedicated to the 

engagement are sufficient to conduct the engagement in accordance 

with applicable professional standards. 

b. Prager Metis shall require the Independent Consultant to apply the New Audit 

Client Protocol to assess and approve any New Audit Clients. New Audit 

Client Acceptance Documentation must be completed, in a sufficient level of 

detail, in connection with the review of any prospective New Audit Client; 

such documentation must also be sufficient to reflect the date upon which the 

New Audit Client Protocol procedures were performed, and that such 

procedures were performed prior to any formal acceptance of the New Audit 

Client by Prager Metis. In the event the Independent Consultant does not 

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approve the acceptance of a New Audit Client, Prager Metis shall not accept 

the client. 

c. Prager Metis shall maintain all New Audit Client Acceptance Documentation 

for a period of seven (7) years, regardless of whether a New Audit Client was 

accepted, and shall make such documentation available to Commission Staff 

upon request, within five (5) business days of any such request. 

E. Other Matters  

23. Prager Metis shall require each audit professional to undergo training, as 

applicable, related to the areas specified in Paragraph 8 and its subsections above. 

24. Prager Metis shall certify, in writing, compliance with the undertakings set forth 

above. The certification shall identify the undertakings, provide written evidence of compliance 

in the form of a narrative, and be supported by exhibits sufficient to demonstrate compliance. 

The Commission staff may make reasonable requests for further evidence of compliance, and 

Defendant agrees to provide such evidence. Defendant shall submit the certification and 

supporting material to the individuals identified in Paragraph 16 no later than sixty (60) days 

from the date of the completion of the undertakings. 

25. Defendant waives the entry of findings of fact and conclusions of law pursuant to 

Rule 52 of the Federal Rules of Civil Procedure. 

26. Defendant waives the right, if any, to a jury trial and to appeal from the entry of 

the Final Judgment. 

27. Defendant enters into this Consent voluntarily and represents that no threats, 

offers, promises, or inducements of any kind have been made by the Commission or any 

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member, officer, employee, agent, or representative of the Commission to induce Defendant to 

enter into this Consent. 

28. Defendant agrees that this Consent shall be incorporated into the Final Judgment 

with the same force and effect as if fully set forth therein. 

29. Defendant will not oppose the enforcement of the Final Judgment on the ground, 

if any exists, that it fails to comply with Rule 65(d) of the Federal Rules of Civil Procedure, and 

hereby waives any objection based thereon. 

30. Defendant waives service of the Final Judgment and agrees that entry of the Final 

Judgment by the Court and filing with the Clerk of the Court will constitute notice to Defendant 

of its terms and conditions. Defendant further agrees to provide counsel for the Commission, 

within thirty days after the Final Judgment is filed with the Clerk of the Court, with an affidavit 

or declaration stating that Defendant has received and read a copy of the Final Judgment. 

31. Consistent with 17 C.F.R. 202.5(f), this Consent resolves only the claims asserted 

against Defendant in this civil proceeding. Defendant acknowledges that no promise or 

representation has been made by the Commission or any member, officer, employee, agent, or 

representative of the Commission with regard to any criminal liability that may have arisen or 

may arise from the facts underlying this action or immunity from any such criminal liability. 

Defendant waives any claim of Double Jeopardy based upon the settlement of this proceeding, 

including the imposition of any remedy or civil penalty herein. Defendant further acknowledges 

that the Court’s entry of a permanent injunction may have collateral consequences under federal 

or state law and the rules and regulations of self-regulatory organizations, licensing boards, and 

other regulatory organizations. Such collateral consequences include, but are not limited to, a 

statutory disqualification with respect to membership or participation in, or association with a 

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member of, a self-regulatory organization. This statutory disqualification has consequences that 

are separate from any sanction imposed in an administrative proceeding. In addition, in any 

disciplinary proceeding before the Commission based on the entry of the injunction in this 

action, Defendant understands that it shall not be permitted to contest the factual allegations of 

the complaint in this action. 

32. Defendant understands and agrees to comply with the terms of 17 C.F.R. 

§ 202.5(e), which provides in part that it is the Commission’s policy “not to permit a defendant 

or respondent to consent to a judgment or order that imposes a sanction while denying the 

allegations in the complaint or order for proceedings,” and “a refusal to admit the allegations is 

equivalent to a denial, unless the defendant or respondent states that he neither admits nor denies 

the allegations.” As part of Defendant’s agreement to comply with the terms of Section 202.5(e), 

Defendant: (i) will not take any action or make or permit to be made any public statement 

denying, directly or indirectly, any allegation in the complaint or creating the impression that the 

complaint is without factual basis; (ii) will not make or permit to be made any public statement 

to the effect that Defendant does not admit the allegations of the complaint, or that this Consent 

contains no admission of the allegations, without also stating that Defendant does not deny the 

allegations; and (iii) upon the filing of this Consent, Defendant hereby withdraws any papers 

filed in this action to the extent that they deny any allegation in the complaint. If Defendant 

breaches this agreement, the Commission may petition the Court to vacate the Final Judgment 

and restore this action to its active docket. Nothing in this paragraph affects Defendant’s: (i) 

testimonial obligations; or (ii) right to take legal or factual positions in litigation or other legal 

proceedings in which the Commission is not a party. 

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33. Defendant hereby waives any rights under the Equal Access to Justice Act, the 

Small Business Regulatory Enforcement Fairness Act of 1996, or any other provision of law to 

seek from the United States, or any agency, or any official of the United States acting in his or 

her official capacity, directly or indirectly, reimbursement of attorney’s fees or other fees, 

expenses, or costs expended by Defendant to defend against this action. For these purposes, 

Defendant agrees that Defendant is not the prevailing party in this action since the parties have 

reached a good faith settlement. 

34. In connection with this action and any related judicial or administrative 

proceeding or investigation commenced by the Commission or to which the Commission is a 

party, Defendant (i) agrees to appear and be interviewed by Commission staff at such times and 

places as the staff requests upon reasonable notice; (ii) will accept service by mail or facsimile 

transmission of notices or subpoenas issued by the Commission for documents or testimony at 

depositions, hearings, or trials, or in connection with any related investigation by Commission 

staff; (iii) appoints Defendant’s undersigned attorney as agent to receive service of such notices 

and subpoenas; (iv) with respect to such notices and subpoenas, waives the territorial limits on 

service contained in Rule 45 of the Federal Rules of Civil Procedure and any applicable local 

rules, provided that the party requesting the testimony reimburses Defendant's travel, lodging, and 

subsistence expenses at the then-prevailing U.S. Government per diem rates; and (v) consents to 

personal jurisdiction over Defendant in any United States District Court for purposes of 

enforcing any such subpoena. 

35. Defendant agrees that the Commission may present the Final Judgment to the 

Court for signature and entry without further notice. 

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