SEC Charges UK Audit Firm, CEO, and Senior Auditor for Failures in Connection with De-SPAC Transaction

The Securities and Exchange Commission today charged Crowe U.K. LLP, a London based audit firm, its CEO, Nigel Bostock, and senior auditor, Matthew Stallabrass, for the firm’s deficient audit of music streaming company Akazoo Limited. Crowe U.K., Bostock, and Stallabrass have agreed to settle the SEC’s charges. According to the SEC’s order, Crowe U.K. issued a clean audit report of Akazoo’s 2018 financial statements. However, as the order finds, after Akazoo went public in September 2019 via merger with a special purpose acquisition company, also known as a De-SPAC transaction, it was revealed that the company’s 2018 financial statements falsely claimed $120 million in revenue when Akazoo had only negligible amounts of revenue.