SEC Charges Audit Partner Failed To Find Fraud At Fund

By Markets MarketWatch Pulse

The Securities and Exchange Commission charged a PricewaterhouseCoopers partner with allegedly failing to find a fraud during his audit of Burrill Life Sciences Capital Fund III, a venture capital fund. The SEC complaint says Adrian D. Beamish failed to scrutinize millions of dollars ''advanced'' management fees taken as unauthorized related-party transactions. Beamish also allegedly failed to ensure that the transactions were properly disclosed in the fund's financial statements. ''Auditors perform a critical check on fraudulent conduct, especially when related party transactions are involved,'' said Jina L. Choi, Director of the SEC's San Francisco Regional Office. The scheduling of a public hearing before an administrative law judge is pending. Earlier this year G. Steven Burrill, the owner and principal of the investment adviser of the fund, settled his SEC case that alleged he spent fund assets to keep his other businesses afloat, travel on family vacations, and pay other unauthorized personal expenses.

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