Hammond, Indiana – Michael Tunney, sole owner of accounting firm Tunney & Associates, P.C. (T&A), has been penalized $100,000 and barred from practicing before the Commodity Futures Trading Commission (CFTC) following a federal court order entered on April 28, 2014. The U.S. District Court, Northern District of Illinois, found Tunney and his firm jointly and severally liable for violating CFTC regulations during audits conducted for The Linn Group (TLG), a registered Futures Commission Merchant.
The case, originating from a CFTC complaint filed April 18, 2013, alleges that T&A and Tunney conducted deficient year-end audits of TLG from 2007 through 2011. The audits were found to have violated Generally Accepted Auditing Standards (GAAS) and CFTC regulations, with critical inadequacies failing to be reported to the CFTC as required.
According to the court order, Tunney and T&A lacked the necessary experience to audit a Futures Commission Merchant, or an entity handling customer segregated accounts. Tunney, a certified public accountant licensed in Illinois and Indiana, also reportedly lacked sufficient understanding of the Commodity Exchange Act and related CFTC provisions before undertaking the audits. The investigation revealed a lack of proper audit planning, and insufficient testing of TLG’s accounting systems, internal controls, and procedures for protecting customer assets.
Judge Sharon Johnson Coleman’s order permanently prohibits both Tunney & Associates, P.C. and Michael Tunney from practicing or appearing before the CFTC, effectively ending their involvement in futures trading oversight. The $100,000 civil monetary penalty is intended to address the violations and deter future misconduct. The CFTC acknowledged assistance from the Division of Swap Dealer and Intermediary Oversight, as well as the National Futures Association, in bringing the case to resolution.
Source: CFTC.gov
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