UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934

Release No. 97259 / April 6, 2023

ACCOUNTING AND AUDITING ENFORCEMENT

Release No. 4396 / April 6, 2023

ADMINISTRATIVE PROCEEDING

File No. 3-21361

In the Matter of

James Fitts, CPA, 

Respondent.

ORDER INSTITUTING PUBLIC

ADMINISTRATIVE AND CEASEAND-DESIST PROCEEDINGS PURSUANT TO 

SECTIONS 4C AND 21C OF THE SECURITIES 

EXCHANGE ACT OF 1934 AND RULE 102(e) 

OF THE COMMISSION’S RULES OF 

PRACTICE, MAKING FINDINGS, AND 

IMPOSING REMEDIAL SANCTIONS AND A 

CEASE-AND-DESIST ORDER

I.

The Securities and Exchange Commission (“Commission”) deems it appropriate that public 

administrative and cease-and-desist proceedings be, and hereby are, instituted against James Fitts,

CPA (“Respondent” or “Fitts”) pursuant to Sections 4C1 and 21C of the Securities Exchange Act 

of 1934 (“Exchange Act”) and Rule 102(e)(1)(ii) of the Commission’s Rules of Practice.2

 

1 Section 4C provides, in relevant part, that: 

The Commission may censure any person, or deny, temporarily or permanently, to any person the 

privilege of appearing or practicing before the Commission in any way, if that person is found . . . 

(1) not to possess the requisite qualifications to represent others; (2) to be lacking in character or 

integrity, or to have engaged in unethical or improper professional conduct; or (3) to have willfully 

violated, or willfully aided and abetted the violation of, any provision of the securities laws or the 

rules and regulations issued thereunder.

2 Rule 102(e)(1)(ii) provides, in pertinent part, that:

The Commission may . . . deny, temporarily or permanently, the privilege of appearing or 

practicing before it . . . to any person who is found . . . to have engaged in unethical or improper 

professional conduct.
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II.

In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (the “Offer”), which the Commission has determined to accept. Solely for the 

purpose of these proceedings and any other proceedings brought by or on behalf of the 

Commission, or to which the Commission is a party, and without admitting or denying the findings 

herein, except as to the Commission’s jurisdiction over him and the subject matter of these 

proceedings, which are admitted, and except as provided herein in Section V, Respondent consents 

to the entry of this Order Instituting Public Administrative and Cease-and-Desist Proceedings 

Pursuant to Sections 4C and 21C of the Securities Exchange Act of 1934 and Rule 102(e) of the 

Commission’s Rules of Practice, Making Findings, and Imposing Remedical Sanctions and a 

Cease-and-Desist Order (“Order”), as set forth below. 

III.

On the basis of this Order and Respondent’s Offer, the Commission finds3that: 

A. SUMMARY

1. In July 2021, the Commission filed a settled cease-and-desist proceeding against Tandy 

Leather Factory, Inc. (“Tandy”) and its former CEO finding accounting, reporting, and control 

failures related to inventory that resulted in a multi-year restatement by Tandy. These failures 

stemmed in part from Tandy’s use of a manual inventory valuation system (“manual system”) that 

failed to properly track inventory on a first-in, first out (“FIFO”) basis, which Tandy disclosed as a 

significant accounting policy. The manual system was a key source of information for the 

inventory figure that Tandy inaccurately reported in its financial statements. 

2. Fitts was the audit engagement partner on Tandy’s fiscal year 2018 audit (“2018 audit”), in 

which a restatement was necessary. During the 2018 audit, Fitts never obtained a sufficient

understanding of the design or implementation of Tandy’s manual system. Fitts failed to follow 

several Public Company Accounting Oversight Board (“PCAOB”) auditing standards when he 

failed to: (1) obtain sufficient understanding of Tandy’s internal control over financial reporting 

(“ICFR”) regarding inventory valuation, including to sufficiently evaluate the design effectiveness 

of those controls; (2) evaluate, respond to, and/or resolve inconsistent audit information; (3) 

sufficiently evaluate company-produced audit evidence; and (4) exercise due professional care, as 

required by the PCAOB. 

 

3

 The findings herein are made pursuant to Respondent's Offer of Settlement and are not binding on any 

other person or entity in this or any other proceeding. 
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3. As a result, Fitts engaged in improper professional conduct within the meaning of Section 

4(C)(a)(2) of the Exchange Act and Rule 102(e)(1)(ii) of the Commission’s Rules of Practice 

(“Rule 102(e)”).

4. Fitts prepared and approved the audit report for fiscal year 2018 that misstated that the 

audit was conducted in accordance with PCAOB standards. Tandy filed the audit report with its 

annual report on Form 10-K for fiscal year 2018. Thus, Fitts was a cause of Tandy’s violations of 

Section 13(a) of the Exchange Act and Rule 13a-1 thereunder.

B. RESPONDENT

5. Fitts, age 49, of Grapevine, TX, is a Certified Public Accountant (“CPA”) licensed to 

practice in Texas. Fitts is a partner in a national audit firm (“Outside Audit Firm”). Fitts served 

as the engagement partner responsible for the quarterly reviews and audit of Tandy’s financial 

statements for fiscal year 2018. 

C. OTHER RELEVANT ENTITIES

6. Outside Audit Firm is a certified public accounting firm registered with the PCAOB. 

Outside Audit Firm was the auditor for Tandy’s 2018 financial statements. 

7. Tandy is a Fort Worth-based retailer of leather goods and leathercraft related items. 

Tandy’s common stock was traded on Nasdaq under the ticker “TLF” until August 13, 2020. 

Tandy’s shares are currently trading on the OTC Link under the symbol “TLFA.” 

D. FACTS

8. On July 21, 2021, the Commission filed a settled cease-and-desist proceeding (Adm. Proc. 

File No. 3-20403) against Tandy and its former CEO finding accounting, reporting, and control 

failures related to inventory that resulted in a multi-year restatement.

9. Because Tandy’s inventory tracking systems were incapable of maintaining historical costs, 

Tandy did not maintain inventory valuations consistent with FIFO. Tandy used at least three 

information systems as a basis for its external reporting, including to track and value its inventory. 

A key issue with one system, known to Tandy, was that it could only track a single price per stock 

keeping unit (“SKU”) at a time and was unable to retain any details about the historical price for 

each SKU. As a workaround, and in an attempt to value inventory on a FIFO cost basis, Tandy’s 

management implemented the manual system. However, this manual system failed to value 

inventory at FIFO. The data and information maintained within the manual system was a key 

source of information for the inventory figure that Tandy inaccurately reported in its financial 

statements, including for 2018. As a result, these inaccurate inventory valuations impacted 

Tandy’s calculations for inventory, net income, and gross profit. 
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10. Fitts, the engagement partner for Tandy’s 2018 audit, failed to sufficiently understand this 

manual system and failed to comply with multiple PCAOB auditing standards, as discussed further 

below. Fitts failed to (1) obtain sufficient understanding of Tandy’s ICFR regarding inventory 

valuation, including to sufficiently evaluate the design effectiveness of those controls; (2) evaluate, 

respond to, and/or resolve inconsistent audit information; (3) sufficiently evaluate companyproduced audit evidence; and (4) exercise due professional care, as required by the PCAOB. Fitts 

engaged in repeated instances of unreasonable conduct indicating a lack of competence to practice 

before the Commission.

Failure to Obtain Sufficient Understanding of Tandy’s ICFR Regarding Inventory 

Valuation, Including to Sufficiently Evaluate the Design Effectiveness of Those Controls

11. PCAOB Auditing Standard No. (“AS”) 2110, Identifying Risks of Material Misstatement, 

states in section 2110.18 that an auditor should obtain a sufficient understanding of internal control 

to (a) identify the types of potential misstatements, (b) assess the factors that affect the risks of 

material misstatement, and (c) design further audit procedures. Further, under AS 2110.20, 

obtaining an understanding of internal control includes evaluating the design of controls that are 

relevant to the audit and determining whether the controls have been implemented.

12. The 2018 audit team’s workpapers did not demonstrate sufficient understanding of Tandy’s 

ICFR regarding inventory valuation as required by AS 2110. The AS 2110 standard notes that 

procedures the auditor performs to obtain evidence about design effectiveness include inquiry of 

appropriate personnel, observation of the company’s operations, and inspection of relevant 

documentation. In addition, it states that a walkthrough that includes these procedures is ordinarily 

sufficient to evaluate design effectiveness. The Fitts-led audit team did not conduct sufficient 

procedures to understand Tandy’s inventory process, including the manual system.

13. There was no audit documentation indicating that Fitts understood the procedures, data, or 

information input into and transferred from Tandy’s manual system, as required. Neither Fitts nor 

others on the 2018 audit team obtained sufficient understanding of the design of the manual system 

used to value Tandy’s inventory during the audit.

14. Fitts failed to perform sufficient audit procedures to obtain evidence sufficient to 

understand Tandy’s manual system for inventory. Regarding the manual system, there is no 

mention in the audit workpapers about: (1) whether the 2018 audit team spoke to any of the 

relevant individuals at Tandy about the manual system, (2) the date of any such inquiry and 

responses provided, (3) the identifying characteristics of any documents inspected, and (4) the 

audit team’s observations. Other than the mention of a walkthrough in the inventory control risk 

memo, there is no evidence that the team actually performed sufficient audit procedures, 

walkthrough or otherwise, to understand Tandy’s manual system. 
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15. In the risk assessment phase for inventory, the audit team identified deficiencies in Tandy’s 

controls with this internal notation:

[W]hile it appears these controls are being performed, based on discussions with 

client, no formal documentation exists that these controls have been performed. No 

initials or sign-offs are evident in review in all situations, therefore these controls 

are not able to be verified and are considered an MLC.

4

 

Tandy’s lack of review and evidence of the performance of the control should have been a red flag 

to Fitts, yet he failed to follow-up or evaluate whether this deficiency extended to how Tandy 

mitigated its risk of improper inventory valuation.

16. As a result, Fitts failed to obtain a sufficient understanding of Tandy’s ICFR regarding 

inventory valuation, including his failure to evaluate the design effectiveness of those controls, in 

violation of AS 2110.

Failure to Evaluate, Respond to, and/or Resolve Inconsistent Audit Information

17. There are at least two instances in which Fitts failed to evaluate, respond to, or resolve

inconsistent audit information within the 2018 audit file. First, during the risk assessment phase of 

the audit, the Fitts-led 2018 audit team documented that Tandy had inventory differences that 

represented either an inventory gain or inventory loss, and cited to an internal Tandy email chain 

noting the CFO’s “approval to book inventory gain/loss.” The possible existence of inventory 

gains at Tandy could have been a red flag for potential non-compliance with FIFO. There is not

sufficient further documentation in the audit file that Fitts investigated this to determine the cause 

of any gains and the potential effect on other aspects of the audit.

18. Second, Fitts testified that he was vaguely aware that Tandy used a manual system

involving supplemental records to help determine inventory valuation. This information was 

contradictory to the inventory process the Fitts-led audit team evaluated during the audit. Fitts, 

however, failed to document the existence of this manual system in the audit file, or revise the 

audit procedures in light of his knowledge of a manual system. The existence of a manual system

to determine inventory valuation was a red flag that Fitts should have investigated further to 

determine the potential effect on other aspects of the audit, but he failed to follow-up.

19. In both instances, Fitts failed to perform sufficient additional audit procedures, revise the 

risk assessment to consider inventory valuation as an elevated risk, or modify the overall audit 

strategy over inventory valuation. Thus, Fitts failed to (1) perform auditing procedures necessary 

to resolve differences in conclusions that were inconsistent and contradictory, and (2) modify the 

overall audit strategy, revise its risk assessment, and/or modify the planned audit procedures as 

required by AS 1105.29, AS 2101.15, AS 2110.74, and AS 2301.46.

 

4 The engagement quality reviewer defined “MLC” as a control deficiency.
6

Failure to Sufficiently Evaluate Company-Produced Audit Evidence

20. AS 1105 states that when using information produced by the company as audit evidence, 

the auditor should evaluate whether the information is sufficient and appropriate for purposes of 

the audit by performing procedures to (1) test the accuracy and completeness of the information, or 

test the controls over the accuracy and completeness of that information; and (2) evaluate whether 

the information is sufficiently precise and detailed for purposes of the audit.

21. As detailed above, Fitts failed to obtain sufficient understanding of Tandy’s ICFR 

regarding the manual system, yet used data and information derived from this manual system 

during the substantive testing phase for inventory (e.g., price testing). Fitts relied on this 

information even though it was not sufficiently evaluated for accuracy, completeness, and 

precision for use as audit evidence, in accordance with AS 1105.

Failure to Exercise Due Professional Care

22. AS 1015 states that auditors are required to exercise due professional care throughout the 

audit. In the 2018 audit, Fitts did not act with due professional care because he did not sufficiently 

understand and document Tandy’s manual system. As a result, Fitts violated AS 1015. 

E. VIOLATIONS

23. Section 4C of the Exchange Act and Rule 102(e)(1)(ii) of the Commission’s Rules of 

Practice provide, in pertinent part, that the Commission may censure or deny, temporarily or 

permanently, the privilege of appearing or practicing before the Commission to any person who is 

found by the Commission to have engaged in improper professional conduct. Section 4C(b)(2) 

and Rule 102(e)(1)(iv)(B) define improper professional conduct to include the following two types 

of negligent conduct: (1) a single instance of highly unreasonable conduct that results in a violation 

of applicable professional standards in circumstances in which an accountant, a registered public 

accounting firm, or associated person knows, or should know, that heightened scrutiny is 

warranted; or (2) repeated instances of unreasonable conduct, each resulting in a violation of 

applicable professional standards, that indicate a lack of competence to practice before the 

Commission.

24. Based on the conduct described above, the Commission finds that Fitts engaged in 

improper professional conduct as defined under Rule 102(e)(1)(iv)(B)(2) pursuant to Section 

4C(a)(2) of the Exchange Act and Rule 102(e)(1)(ii) of the Commission’s Rules of Practice.

25. Based on the conduct described above, Fitts was a cause of Tandy’s violations of Section 

13(a) of the Exchange Act and Rule 13a-l thereunder. Section 13(a) of the Exchange Act and Rule 

13a-1 thereunder require issuers of securities registered under Section 12 of the Exchange Act to 

file with the Commission accurate annual reports that have been audited by an independent public 
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accountant registered with the PCAOB. Tandy filed an annual report on Form 10-K for fiscal year 

2018 and included the audit report that was ultimately prepared and approved by Fitts. This audit 

report misstated that the audit was conducted in accordance with PCAOB standards. 

F. FINDINGS

26. Based on the foregoing, the Commission finds that Fitts engaged in improper 

professional conduct pursuant to Section 4C(a)(2) of the Exchange Act and Rule 102(e)(1)(ii) of 

the Commission’s Rules of Practice.

27. Based on the foregoing, the Commission finds that Fitts was a cause of Tandy’s

violations of Sections 13(a) of the Exchange Act and Rule 13a-1 promulgated thereunder.

IV.

In view of the foregoing, the Commission deems it appropriate to impose the sanctions 

agreed to in Respondent Fitts’s Offer.

Accordingly, it is hereby ORDERED, effective immediately, that:

A. Fitts shall cease and desist from committing or causing any violations and any future 

violations of Section 13(a) of the Exchange Act and Rule 13a-1 promulgated thereunder. 

B. Fitts is denied the privilege of appearing or practicing before the Commission as an 

accountant. 

C. After one year from the date of the Order, Fitts may request that the Commission 

consider Fitts’s reinstatement by submitting an application to the attention of the Office of the 

Chief Accountant.

D. In support of any application for reinstatement to appear and practice before the 

Commission as a preparer or reviewer, or a person responsible for the preparation or review, of 

financial statements of a public company to be filed with the Commission, other than as a member 

of an audit committee, as that term is defined in Section 3(a)(58) of the Exchange Act, Respondent 

shall submit a written statement attesting to an undertaking to have Respondent’s work reviewed 

by the independent audit committee of any public company for which Respondent works or in 

some other manner acceptable to the Commission, as long as Respondent practices before the 

Commission in this capacity and will comply with any Commission or other requirements related 

to the appearance and practice before the Commission as an accountant.

E. In support of any application for reinstatement to appear and practice before the 

Commission as a member of an audit committee, as that term is defined in Section 3(a)(58) of the 
8

Exchange Act, as a preparer or reviewer, or as a person responsible for the preparation or review, 

of any public company’s financial statements that are filed with the Commission, Respondent shall 

submit a statement prepared by the audit committee(s) with which Respondent will be associated, 

including the following information:

1. A summary of the responsibilities and duties of the specific audit committee(s) 

with which Respondent will be associated;

2. A description of Respondent’s role on the specific audit committee(s) with 

which Respondent will be associated;

3. A description of any policies, procedures, or controls designed to mitigate any 

potential risk to the Commission by such service; 

4. A description relating to the necessity of Respondent’s service on the specific 

audit committee; and

5. A statement noting whether Respondent will be able to act unilaterally on behalf 

of the Audit Committee as a whole. 

F. In support of any application for reinstatement to appear and practice before the 

Commission as an independent accountant (auditor) before the Commission, Respondent must be 

associated with a public accounting firm registered with the Public Company Accounting 

Oversight Board (the “PCAOB”) and Respondent shall submit the following additional 

information:

1. A statement from the public accounting firm (the “Firm”) with which 

Respondent is associated, stating that the firm is registered with the PCAOB in 

accordance with the Sarbanes-Oxley Act of 2002;

2. A statement from the Firm with which the Respondent is associated that the 

Firm has been inspected by the PCAOB and that the PCAOB did not identify 

any criticisms of or potential defects in the Firm’s quality control system that 

would indicate that Respondent will not receive appropriate supervision; and

3. A statement from Respondent indicating that the PCAOB has taken no 

disciplinary actions against Respondent since seven (7) years prior to the date of 

the Order other than for the conduct that was the basis for the Order.

G. In support of any application for reinstatement, Respondent shall provide 

documentation showing that Respondent is currently licensed as a certified public accountant 

(“CPA”) and that Respondent has resolved all other disciplinary issues with any applicable state 

boards of accountancy. If Respondent is not currently licensed as a CPA, Respondent shall provide 
9

documentation showing that Respondent’s licensure is dependent upon reinstatement by the 

Commission. 

H. In support of any application for reinstatement, Respondent shall also submit a 

signed affidavit truthfully stating, under penalty of perjury: 

1. That Respondent has complied with the Commission suspension Order, and 

with any related orders and undertakings, including any orders in In the Matter 

of James Fitts, CPA, or any related Commission proceedings, including any 

orders requiring payment of disgorgement or penalties;

2. That Respondent undertakes to notify the Commission immediately in writing if 

any information submitted in support of the application for reinstatement 

becomes materially false or misleading or otherwise changes in any material 

way while the application is pending;

3. That Respondent, since the entry of the Order, has not been convicted of a 

felony or a misdemeanor involving moral turpitude that would constitute a basis 

for a forthwith suspension from appearing or practicing before the Commission 

pursuant to Rule 102(e)(2); 

4. That Respondent, since the entry of the Order:

(a) has not been charged with a felony or a misdemeanor involving 

moral turpitude as set forth in Rule 102(e)(2) of the 

Commission’s Rules of Practice, except for any charge 

concerning the conduct that was the basis for the Order;

(b) has not been found by the Commission or a court of the United 

States to have committed a violation of the federal securities 

laws, and has not been enjoined from violating the federal 

securities laws, except for any finding or injunction concerning 

the conduct that was the basis for the Order; 

(c) has not been charged by the Commission or the United States 

with a violation of the federal securities laws, except for any 

charge concerning the conduct that was the basis for the Order;

(d) has not been found by a court of the United States (or any 

agency of the United States) or any state, territory, district, 

commonwealth, or possession, or any bar thereof to have 

committed an offense (civil or criminal) involving moral 
10

turpitude, except for any finding concerning the conduct that 

was the basis for the Order; and

(e) has not been charged by the United States (or any agency of the 

United States) or any state, territory, district, commonwealth, or 

possession, civilly or criminally, with having committed an act 

of moral turpitude, except for any charge concerning the conduct 

that was the basis for the Order.

5. That Respondent’s conduct is not at issue in any pending investigation of 

the Commission’s Division of Enforcement, the PCAOB’s Division of 

Enforcement and Investigations, any criminal law enforcement 

investigation, or any pending proceeding of a State Board of Accountancy, 

except to the extent that such conduct concerns that which was the basis for 

the Order.

6. That Respondent has complied with any and all orders, undertakings, or 

other remedial, disciplinary, or punitive sanctions resulting from any action 

taken by any State Board of Accountancy, or other regulatory body.

I. Respondent shall also provide a detailed description of:

1. Respondent’s professional history since the imposition of the Order, including 

(a) all job titles, responsibilities and role at any employer;

(b) the identification and description of any work performed for 

entities regulated by the Commission, and the persons to whom 

Respondent reported for such work; and 

2. Respondent’s plans for any future appearance or practice before the 

Commission.

J. The Commission may conduct its own investigation to determine if the foregoing 

attestations are accurate.

K. If Respondent provides the documentation and attestations required in this Order 

and the Commission (1) discovers no contrary information therein, and (2) determines that 

Respondent truthfully and accurately attested to each of the items required in Respondent’s 

affidavit, and the Commission discovers no information, including under Paragraph J, indicating 

that Respondent has violated a federal securities law, rule or regulation or rule of professional 

conduct applicable to Respondent since entry of the Order (other than by conduct underlying 

Respondent’s original Rule 102(e) suspension), then, unless the Commission determines that 
11

reinstatement would not be in the public interest, the Commission shall reinstate the respondent for 

cause shown.

L. If Respondent is not able to provide the documentation and truthful and accurate 

attestations required in this Order or if the Commission has discovered contrary information, 

including under Paragraph J, the burden shall be on the Respondent to provide an explanation as to 

the facts and circumstances pertaining to the matter setting forth why Respondent believes cause 

for reinstatement nonetheless exists and reinstatement would not be contrary to the public interest. 

The Commission may then, in its discretion, reinstate the Respondent for cause shown. 

M. If the Commission declines to reinstate Respondent pursuant to Paragraphs K and 

L, it may, at Respondent’s request, hold a hearing to determine whether cause has been shown to 

permit Respondent to resume appearing and practicing before the Commission as an accountant.

N. Respondent shall, within 30 days of the entry of this Order, pay a civil money 

penalty in the amount of $25,000 to the Securities and Exchange Commission for transfer to the 

general fund of the United States Treasury, subject to Exchange Act Section 21F(g)(3). If timely 

payment is not made, additional interest shall accrue pursuant to 31 U.S.C. §3717. 

Payment must be made in one of the following ways: 

(1) Respondent may transmit payment electronically to the Commission, which 

will provide detailed ACH transfer/Fedwire instructions upon request; 

(2) Respondent may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or 

(3) Respondent may pay by certified check, bank cashier’s check, or United 

States postal money order, made payable to the Securities and Exchange 

Commission and hand-delivered or mailed to: 

Enterprise Services Center

Accounts Receivable Branch

HQ Bldg., Room 181, AMZ-341

6500 South MacArthur Boulevard

Oklahoma City, OK 73169

Payments by check or money order must be accompanied by a cover letter identifying Fitts

as a Respondent in these proceedings, and the file number of these proceedings; a copy of the 

cover letter and check or money order must be sent to Eric Werner, Division of Enforcement, 

Securities and Exchange Commission, 801 Cherry Street, Suite 1900, Fort Worth, Texas 76102. 
12

O. Amounts ordered to be paid as civil money penalties pursuant to this Order shall be 

treated as penalties paid to the government for all purposes, including all tax purposes. To 

preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 

Action, he shall not argue that he is entitled to, nor shall he benefit by, offset or reduction of any 

award of compensatory damages by the amount of any part of Respondent’s payment of a civil 

penalty in this action ("Penalty Offset"). If the court in any Related Investor Action grants such a 

Penalty Offset, Respondent agrees that he shall, within 30 days after entry of a final order granting 

the Penalty Offset, notify the Commission's counsel in this action and pay the amount of the 

Penalty Offset to the Securities and Exchange Commission. Such a payment shall not be deemed 

an additional civil penalty and shall not be deemed to change the amount of the civil penalty 

imposed in this proceeding. For purposes of this paragraph, a "Related Investor Action" means a 

private damages action brought against Respondent by or on behalf of one or more investors based 

on substantially the same facts as alleged in the Order instituted by the Commission in this 

proceeding.

V.

It is further Ordered that, solely for purposes of exceptions to discharge set forth in Section 

523 of the Bankruptcy Code, 11 U.S.C. §523, the findings in this Order are true and admitted by 

Respondent, and further, any debt for disgorgement, prejudgment interest, civil penalty or other 

amounts due by Respondent under this Order or any other judgment, order, consent order, decree 

or settlement agreement entered in connection with this proceeding, is a debt for the violation by 

Respondent of the federal securities laws or any regulation or order issued under such laws, as set 

forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. §523(a)(19).

By the Commission.

Vanessa A. Countryman

Secretary