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Recently, the Securities and Exchange Commission (SEC) has instituted several administrative proceedings against accounting firms and auditors under Rule 102(e) of the Commission’s Rules of Practice for audits of companies—now bankrupt or in financial peril—that occurred in the lead-up to the financial crisis. Just last week in In re John J. Aesoph and Darren M. Bennett, for example, the SEC charged two auditors at KPMG with “improper professional conduct” under Rule 102(e) for their roles in a failed audit of a Nebraska-based bank that hid millions of dollars in loan losses from investors during the financial crisis and was eventually forced to file for bankruptcy. In an SEC news bulletin from Jan. 9, Robert Khuzami, outgoing director of the SEC’s Division of Enforcement, is quoted as saying that the auditors “ignored the red flags surrounding the bank’s troubled real estate loans,” and that “[a]uditors must adhere to professional auditing standards and exercise due diligence rather than merely relying on management’s representations” with respect to the preparation of financial statements. The auditors are now facing temporary or permanent loss of the privilege of appearing or practicing before the SEC. This fallout from the financial crisis, and associated enforcement rhetoric, is causing practitioners to reexamine their potential scope of liability under Rule 102(e), which was, up until now, a little-used weapon in the SEC’s arsenal.