Here's a target list if SEC Enforcement really wants to "hammer" the gatekeepers

Gurbir Grewal says trust in the markets has deteriorated because regulators are not holding scofflaws, including auditors, accountable.

I know it seems. Pretty basic, but it raises that question. That I was asking in my opening remarks, Where are the gatekeepers? What should the gatekeepers be doing here? What advice? You know, this is my first time here and I hope I get invited back. You know, I'm hammering, I'm hammering the gatekeepers, but what advice can we give the gatekeepers so they could you know, meet their obligations and we don't see another WageWorks. We don't see another Under Armour. We don't see another Tandy… Gurbir Grewal, December 8, 2021

The Director of the SEC Division of Enforcement, Gurbir Grewal, and Matt Jacques, Chief Accountant of the Enforcement Division, had plenty to say to an audience of accountants, auditors, and company CFOs on December 8, 2021 at the AICPA SEC/PCAOB Conference — the “Catalina Wine Mixer” of accounting conferences according to Jacques.

Grewal, the former Attorney General of New Jersey and a former U.S. Attorney, was particularly frank, despite the fact he’s only been on the job six months. I wrote earlier about Gurbir’s remarks about staying ahead of emerging threats. I wrote about a case that would give the SEC a two-for-one, “one that if followed-up on may throttle a SPAC deal in the stablecoin space.”

In particular, Grewal and Jacques singled out gatekeepers — specifically auditors— for what he said were obvious, recurring lapses.

We need to make sure that gatekeepers are doing their jobs, that gatekeepers are discharging their duties with good faith [that] they're holding their corporate clients to task, making sure that they play by the rules. You are uniquely positioned in this room to help build back that trust, to help build back that trust in the financial reporting domain. Your front row responsibilities for reporting and disclosures are critically important.

And as gatekeepers, I think, you know, you're going to play a critical role moving forward …I was talking and joking back in the holding room, I said Matt, these fact patterns, they're just so basic. This still happens…You know, this is not new conduct.

Today I’m going to give Grewal and Jacques a few ideas about cases that the SEC may or may not still be looking at, after enforcement actions that I think fell short of holding everyone accountable. There are also a few cases not yet brought that should be. It’s not clear whether the SEC is looking at them at all.