WASHINGTON, August 30, 2017 - Outside auditing firm KPMG will pay $6.2 million to settle charges from the Securities and Exchange Commission (SEC) that it failed to properly audit financial statements of an oil and gas company. The SEC says the 2011 blunder led to investors receiving misinformation about Miller Energy Resources’ value. “KPMG retained a new client and failed to grasp how it valued oil and gas properties, resulting in investors being misinformed that properties purchased for less than $5 million were worth a half-billion dollars,” said Walter Jospin, director of the SEC’s Atlanta Regional Office. KPMG’s engagement partner, John Riordan, has also agreed to settle charges against him. The SEC found KPMG and Riordan’s improper conduct caused Miller Energy to violate the Securities Exchange Act and rules. KPMG will refund audit fees of nearly $4.7 million to Miller Energy plus over $550,000 in interest and pay a penalty of $1 million. Riordan will pay a $25,000 penalty and be suspended from appearing or practicing before the SEC as an accountant for no less than two years. Riordan is permitted to apply for reinstatement after completion of suspension.
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