A Multi-Year Accounting Fraud

Many investors seek to obtain background materials on firms in which they invest.  In making those requests many seek to obtain audited financial statements for the firm whose shares are being offered. The audited financial statements will often aid the investment decision making process by giving the potential investor comfort that the firm has been carefully examined by a professional. While that conclusion may be reasonable, it is not always correct unfortunately.  While seeking a copy of the firm’s audited financial statements can be a good beginning in many instances that is not always the case. The Commission’s most recent case involving fake audit reports is a good example.  SEC v. Olayhinka Temitope Oyebola, Civil Action No. 24-cv-7376 (S.D.N.Y.).

Named as Defendants in the action are: Olayinka Temitope Oyebola  and accounting firm Olayinka Oyebola & Company.  The firm was registered with the PCAOB.

The complaint alleges as to Oyebola and his firm that they deliberately failed to take action after learning that a businessman known as Dozy Mmobousi and three related U.S. entities that Mmobuosi controlled created multiple fake audit reports bearing Oyebola’s signature.  Those reports were included in SEC filings. Oyebola and his firm also helped Mmobuosi conceal the fact that the audit reports were fake, resulting in the auditor, investors, and regulators relying on the misstatements and report to their detriment. They thus aided in the implementation of a multiyear fraudulent scheme.

The SEC’s complaint alleged violations of Securities Act Section 17(a) and Exchange Act Section 10(b) and Rule 10b-5. Defendants settled the matter, consenting to the entry of permanent injunctions based on the provisions cited. In addition, Defendant Oyebota was also enjoined from future violations of Exchange Act Rules 13b-2-2(a) and (b).  In addition, Mr. Oyebola and his firm were directed to pay civil monetary penalties of $100,000.

Subsequently, the Commission issued orders under Rule 102(e) as to Defendants based on the entry of the judgments. Respondents agreed to be suspended from appearing and practicing before the Commission as accountants.  They have the right to apply for reinstatement after six years.   See  Lit. Rel. No. 26373 (Aug. 13, 2025).