SEC Charges Two KPMG Auditors with Improper Audit of Nebraska Bank Hiding Loan Losses During Financial Crisis

The SEC has initiated public administrative proceedings to determine whether two auditors at KPMG engaged in improper professional conduct in auditing a holding company for a Nebraska-based thrift bank that allegedly hid millions of dollars in loan losses from investors during the financial crisis and eventually was forced into receivership. The SEC Division of Enforcement alleges that the auditors failed to subject to adequate scrutiny internal controls at the bank and loan loss estimates based on dated collateral appraisals.The SEC previously charged three former TierOne Bank executives responsible for the scheme.

See: SEC Order; SEC Press Release (links externally to SEC website).