The US Securities and Exchange Commission (SEC) charged China-located affiliates of the big five US accounting firms with breaking securities laws by failing to provide documents from their audits of nine Chinese firms under scrutiny, The New York Times reported. The accounting companies, Deloitte, Ernst & Young, KPMG, PricewaterhouseCoopers and BDO, claim that releasing the papers would violate Chinese law, the SEC said Monday. The accounting firms face possible sanctions including being forbidden from practicing before the SEC, which would mean that their audits of public companies would not satisfy US securities laws. The nine Chinese companies, which the agency did not name, have stocks listed in the US, making them subject to US securities laws. The SEC has already delisted the securities of nearly 50 reverse merger companies, many of them Chinese, and filed fraud cases against 40 foreign companies and executives.
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