The Securities and Exchange Commission (SEC) has announced settled charges against Francis Decker, a CPA who acted as the lead engagement partner at Prager Metis CPAs, LLC on its audits of the now-defunct crypto asset trading platform FTX, relating to Decker’s conduct during the FTX audits.

The SEC had previously settled charges with Prager Metis in connection with its FTX audits.

According to the SEC’s order, beginning in February 2021, Decker led a Prager Metis team in conducting audits of the financial statements of FTX.

The SEC’s order finds that the audits were not conducted in accordance with Generally Accepted Accounting Standards (GAAS) and that Decker’s negligent conduct during those audits resulted in a violation of those applicable professional standards.

Specifically, the SEC’s order finds that the foundational failure to meet GAAS stemmed from the fact that Decker did not have a sufficient understanding of FTX, or the crypto asset markets in which it operated and the engagement team that Decker assembled collectively lacked the competence, experience, and knowledge to appropriately conduct the audits.

The order further finds that from this initial failure flowed a series of other auditing failures in the design and execution of the audits, which resulted in the issuance of audit reports that each contained an opinion that FTX’s financial statements presented fairly, in all material respects, the financial position of FTX and its subsidiaries in accordance with accounting principles generally accepted in the United States of America.

Notwithstanding this, the order finds that due to the auditing failures, Decker and the Prager Metis team lacked sufficient appropriate audit evidence to support those opinions.

As a result, the SEC’s order finds that Decker engaged in improper professional conduct pursuant to Section 4C(a)(2) of the Securities Exchange Act of 1934 and Rule 102(e)(1)(ii) of the Commission’s Rules of Practice.

Without admitting or denying the findings, Decker has agreed to a sanction denying him the privilege of appearing or practicing before the Commission as an accountant, with a right to request reinstatement after two years from the date of the SEC’s order.