The former auditing firm of failed crypto exchange FTX has been sued by the U.S Securities and Exchange Commission (SEC). The SEC alleges that Prager Metis violated U.S. auditor independence rules, according to a court filing.
Prager Metis help its clients to break federal securities laws, the SEC alleges. The regulator is seeking an injunction against the auditor and wants it to pay fines and give up any profits made from illegal activity.
Prager Metis audited FTX’s international arm and reported $1 billion in revenues in 2021 with a $7 billion shortfall on its balance sheet.
The SEC’s complaint is not centered on the auditor’s ties to FTX but on agreements the firm made with its numerous clients.