“The sanctions will protect our markets by promoting an ethical culture at KPMG,” said Melissa Hodgman, associate drector of the SEC’s Enforcement Division.  “To that end, KPMG will take additional remedial steps to address the misconduct and further strengthen its quality controls, all of which will be reviewed and assessed by an independent consultant.”

In addition to paying the $50 million penalty, KPMG is required to evaluate its quality controls relating to ethics and integrity, identify audit professionals who violated ethics and integrity requirements in connection with training examinations within the past three years, and comply with a cease-and-desist order.  The SEC’s order requires KPMG to retain an independent consultant to review and assess the firm’s ethics and integrity controls and its investigation.

KPMG has admitted the facts in the SEC’s order. It has also acknowledged that its conduct violated a PCAOB rule requiring the firm to maintain integrity in the performance of a professional service and provides a basis for the SEC to impose remedies against the firm pursuant to Sections 4C(a)(2) and (a)(3) of the Exchange Act and Rules 102(e)(1)(ii) and (iii) of the Commission’s Rules of Practice.