“Surprise custody exams of investment advisers serve a critical role in protecting against the misuse of client assets and uncovering such misuse when it occurs,” said Anthony S. Kelly, Chief of the SEC Enforcement Division’s Asset Management Unit.  “Santos, Postal & Co. failed to confirm with SFX’s clients the contributions made to and from their accounts and then made untrue statements about its custody exams.”

The SEC already charged the head of SFX, Brian Ourand, with stealing over $670,000 from three of his clients. He has since been ordered to disgorge the money, plus pay an additional $300,000 penalty. 

The accounting firm agreed to settle the SEC's charges against it by disgorging $25,800 in profits the firm got for performing the exams, plus $3,276 in interest, plus an additional $15,000 in penalties. The firm and the partner is also suspended from appearing and practicing before the SEC as an accountant for at least five years.