April 28, 2014
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) obtained a federal court Consent Order against Tunney & Associates, P.C. (T&A), an accounting firm with offices in Hammond, Indiana and Orland Park, Illinois, and Michael Tunney, its sole owner and a certified public accountant (CPA) licensed in Illinois and Indiana, requiring T&A and Tunney jointly and severally to pay a $100,000 civil monetary penalty for violating CFTC Regulations when conducting audits for The Linn Group (TLG), a CFTC-registered Futures Commission Merchant (FCM).
The Order, entered on April 28, 2014, by Judge Sharon Johnson Coleman of the U.S. District Court, Northern District of Illinois, also permanently prohibits T&A and Tunney from practicing or appearing before the CFTC and from violating the provisions of the CFTC’s Regulations related to independent auditors, as charged.
The Order stems from a CFTC Complaint filed April 18, 2013, that charged T&A and Tunney with conducting year-end audits of TLG for 2007 through 2011 in violation of Generally Accepted Auditing Standards (GAAS) and CFTC Regulations and failing to report material inadequacies to the CFTC when required to do so (see CFTC Press Release 6571-13).
The Order finds that T&A and Tunney did not have experience auditing FCMs or any entity that held customer segregated accounts, were not qualified to conduct an FCM audit, and that Tunney lacked sufficient understanding of the applicable Commodity Exchange Act or CFTC regulatory provisions prior to accepting any of the audit engagements. The Order also finds that there was no planning for the auditing of TLG, and the audits failed to include appropriate tests of TLG’s accounting system, internal accounting controls, and procedures for safeguarding customer and firm assets.
The CFTC appreciates the assistance of the Division of Swap Dealer and Intermediary Oversight. The CFTC also appreciates the assistance of the National Futures Association.
The CFTC Division of Enforcement staff members responsible for this matter are Allison Passman, Joseph Patrick, Susan Gradman, Scott Williamson, Rosemary Hollinger, and Richard B. Wagner.
Last Updated: April 28, 2014