Accounting firm Prager Metis has agreed to pay $1.95 million in a settlement with the U.S. Securities and Exchange Commission (SEC) over its audits of defunct cryptocurrency platform FTX. The SEC alleges that Prager Metis violated auditor independence requirements and was negligent in its audits of FTX. The firm issued two audit reports for FTX and claimed to be in compliance with auditing standards, but the SEC says it failed to properly assess its competence and resources and overlooked risks associated with FTX's CEO's hedge fund. Prager Metis faces a civil penalty, permanent injunctions, and the requirement to hire an independent consultant. The firm has also pleaded guilty to separate charges related to violations of auditor independence rules and will pay an additional $1.205 million in penalties and disgorgement.
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