Contact Us for a Consultation

Accounting and Professional Liability

Sacher Zelman Hartman, P.A. has represented local, regional, national, and international accounting firms in a variety of matters, ranging from successful defenses of claims of purported accountants' liability, and alleged financial fraud, in court litigation and arbitrations nationwide. With the passage of the Sarbanes-Oxley Act of 2002, the Firm has developed a vibrant, nationwide Sarbanes practice, with a focus on advising accounting firms on SEC regulatory compliance, PCAOB compliance, and avoidance of accountant's liability claims. In addition, the Firm represents accounting firms in complying with SEC investigative and Grand Jury subpoenas, and requests from state civil regulatory and criminal prosecutors, for both document production, investigative or deposition discovery, and in connection with Grand Jury appearances, in Florida, New York, Connecticut, Texas, and California, among other locations. The Firm also regularly advises accounting firms in matters pertaining to avoidance of claims by both prospective and current clients and non-clients, client intake and retention, and compliance with AICPA rules and regulations. Also of note, the Firm successfully prosecuted one of the last malpractice claims against Arthur Andersen before the demise of that accounting firm.

The Firm's practice has been led by Barton S. Sacher (until his death in 2015) and Roy M. Hartman. Mr. Sacher is the former U.S. Securities and Exchange Commission's Chief of Investigations and Enforcement for the Southeastern United States. Mr. Hartman is a former Enforcement Attorney and Trial Counsel for the SEC's Miami Regional Office. Together, Messrs. Sacher and Hartman had nearly 70 years of experience in dealing with securities laws compliance, litigation, and enforcement proceedings. They have lectured on Sarbanes-Oxley, the SEC rules promulgated thereunder, and the standards of the PCAOB and AICPA, as well as accountant's liability under state and federal laws. The Firm is well positioned to represent and advise any accounting firm, whether in litigation, or before any governmental agency, or for general/risk management advise.

In addition to the sophisticated practice areas outlined above, the Firm’s attorneys have routinely defended routine malpractice claims against accountants and their accounting firms.

Recent Matters Handled for Accounting Firms

Able Energy (State Court of N.Y.): Assisted litigation counsel in successful defense of claims brought by public company against national accounting firm based upon applicable New York law to uphold and apply indemnification provision in accounting firm’s engagement letter.

Kast v. Tube Media, et al. (Broward County Circuit Court Complex Litigation Division): Successfully obtained dismissal of prejudice of claims for negligence, Florida securities fraud, aiding and abetting breaches of fiduciary duty, common law fraud and conspiracy against international accounting firm, and obtain order of entitlement of attorneys’ fees for accounting firm as prevailing party under Chapter 517, Florida statutes.

U.S. v. David Brooks and Sandra Hatfield (E.D.N.Y. in Central Islip): Represented large Florida regional accounting firm in preparing and filing then-first Section 10A report, involving a $185 million inventory and insider trading "pump and dump" fraud scheme at a Florida based public company. Accounting firm later served as a key Government witness, which led to the conviction of former CEO and COO of the public company.

SEC v. Cedric Kushner Promotions et al. (S.D.N.Y. in Manhattan): Represented national accounting firm, which provided information statutorily required to the SEC, that led to the first successful Section 14A prosecution of public company and a bar of its CEO, arising from filing of false auditor's report in violation of Sarbanes-Oxley Amendments.

SEC v. Southridge Capital Mgmt. (D.Conn. in Hartford) and companion Connecticut Division of Banking lawsuit: Represented national accounting firm as a witness in a securities fraud action against a national hedge fund.

UBuy Holdings, Inc. v. Gladstone, 340 F.Supp.2d 1343 (S.D. Fla. 2004 in Fort Lauderdale): Successfully defended large national accounting firm and small regional New York-based accounting firm in securities fraud class action, resulting in a dismissal with prejudice in favor of each firm, and an award of attorneys' fees and costs in favor of each firm under the PSLRA.

U.S. v. Schusterman (E.D. Pa. in Philadelphia): Represented large national accounting firm that supplied evidence and testimony to the Government to convict former CFO of Kimber Manufacturing (one of the largest U.S. gun makers), in a multi-year fraud and embezzlement scheme he perpetrated.

Currently representing a large national accounting firm in responding to numerous requests and subpoenae from the SEC involving a public company auditor client.

In re Cornerstone Propane Partners (Bkrtcy. S. D. N.Y. in Manhattan): Represented the auditors of the bankrupt public company, and successfully obtained an Order of the Bankruptcy Court that Marcum be appointed Special Accountants for the Debtor to respond to and produce hundreds of thousands of pages of documents pursuant to a SEC investigative subpoena. All costs incurred by Marcum, including its legal fees, were paid by the Debtor, as approved by the Bankruptcy Court, pursuant to Marcum's Engagement Agreement with its client.

CalPERs et al. v. Arthur Andersen (D. Ariz. in Phoenix): Successfully represented CalPERS and two large, private venture capital funds in a lawsuit against Arthur Andersen due to the accounting firm's failure to properly audit a company in which the Plaintiffs had invested tens of millions of dollars.

Club Marketing v. RCH: Successful defense of auditors in case brought by insurance holding company, resulting in summary judgment of dismissal and recovery of all attorneys’ fees by contract.

Represented a large national accounting firm in responding to numerous requests and subpoenae from the SEC and the USAO/EDNY involving a series of hedge funds.

Represented regional accounting firms subpoenaed by the SEC in Miami to provide investigative testimony and to produce documents.

Successfully negotiated with numerous SEC offices and DOJ, as well as state regulators, the need for accounting firms to maintain current and regular document retention policies regarding ongoing "work-in-progress" before same become final "workpapers" when faced with a Government subpoena for documents pertaining to current attestation work for client of CPA firm.

Review/revise, as needed, engagement letters and client in-take and withdrawal procedures for numerous accounting firms to ensure same are PCAOB/AICPA compliant, as well as to best protect the CPA firm.

Advise numerous accounting firms on PCAOB/SEC rules and regulations in such diverse matters as independence issues, record retention, and restatement issues.