FOR IMMEDIATE RELEASE
Washington D.C. — The Securities and Exchange Commission today announced proceedings against a PricewaterhouseCoopers audit partner who served as engagement partner for the independent audits of a venture capital fund.
The SEC Enforcement Division alleges that Adrian D. Beamish, who is based in San Jose, Calif., failed to scrutinize millions of dollars taken from Burrill Life Sciences Capital Fund III in related party transactions under the guise of “advanced” management fees. Beamish allegedly failed to determine whether the fund’s adviser had proper authorization and rationale for taking the money. Beamish also allegedly failed to ensure that the transactions were properly disclosed in the fund’s financial statements.
The owner and principal of the investment adviser, G. Steven Burrill, settled an SEC case earlier this year that found that he spent the money he took from the fund to keep his other businesses afloat, travel on family vacations, and pay other unauthorized personal expenses.
“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. “We allege that Beamish’s repeated failure to exercise professional skepticism prevented him from recognizing that Burrill was stealing investor money from the fund.”
The administrative proceedings against Beamish will determine whether he should be suspended from appearing or practicing before the SEC as an accountant, which includes not participating in the financial reporting or audits of public companies. The matter will be scheduled for a public hearing before an administrative law judge, who will prepare an initial decision stating what, if any, remedial actions are appropriate.
The SEC Enforcement Division’s investigation was conducted by Heather E. Marlow and John Roscigno and supervised by Tracy Davis in the San Francisco office. The litigation will be handled by E. Barrett Atwood, Robert Tashjian, and Ms. Marlow.