**Release: 4203-98 (CFTC Docket 98-11)**

**For Release: November 2, 1998**

**CFTC ISSUES ORDER FINDING HENRY & HORNE, PLC, AN ACCOUNTING FIRM,    ENGAGED IN IMPROPER UNPROFESSIONAL CONDUCT**

WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced    today that it issued an order accepting an offer of settlement from **Henry & Horne, PLC**, a public accounting firm, in Tempe, Arizona, in    connection with a complaint filed by the CFTC on April 8, 1998 (see CFTC    News Release #4132-98, April 8,    1998).

The CFTC's order finds that Henry & Horne engaged in "improper    unprofessional conduct" and permanently denies the firm the privilege of    appearing or practicing before the CFTC, with a right to apply for    reinstatement in five years. Henry & Horne agreed to the order without    admitting or denying the findings therein.

The CFTC order, filed on October 21, 1998, finds that between March 1992    and September 1995, Henry & Horne engaged in improper unprofessional    conduct in performing four separate annual audits of **O'Connell    & Associates (OCA)**, a Vermont limited partnership, operated by **Thomas O'Connell** as a commodity pool. (O'Connell, in an    injunctive action filed by the CFTC in the United States District Court for    the District of Vermont, was alleged to have operated OCA as a Ponzi scheme    and defrauded investors of more than $14 million before he was arrested by    law enforcement authorities. In that action, O'Connell consented to    the entry of a permanent injunction and other relief.)

Specifically, the CFTC order finds that Henry & Horne auditors    failed to plan properly the 1991, 1992, 1993 and 1994 audits; failed to    obtain sufficient competent evidential matter, particularly involving the    existence of certain trading account balances; failed to employ adequate    analytical procedures considering OCA's consistently profitable    trading performance; failed to maintain an attitude of professional    skepticism regarding OCA's trading performance, balance discrepancies    and other matters; and failed to detect errors and irregularities,    including O'Connell's fraud. As a result of these failures to    adhere to the requirements of Generally Accepted Auditing Standards (GAAS),    Henry & Horne engaged in "improper unprofessional conduct" within the    meaning of Section 14.8(c) of the CFTC's regulations.

Under the terms of the settlement with Henry & Horne, the firm is    permanently denied the privilege of appearing or practicing before the CFTC    and agrees not to apply to the CFTC for reinstatement for five years from    the date of the order. If Henry & Horne applies to the Commission for    reinstatement after that date, the Commission will grant such application    if it finds, upon consideration of Henry & Horne's professional    performance and disciplinary record and any other relevant information, no    grounds to warrant denying it the privilege of appearing or practicing    before it.

Previously, in a related matter, the Commission entered an order,    pursuant to an offer of settlement, as to Sherald Griffin and Donna    Laubscher, accountants with Henry & Horne, finding that they had    engaged in improper unprofessional conduct based on the audits that are the    subject of the Henry & Horne order.