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"You can observe a lot just by watching." Yogi Berra

"We do not distain to borrow wit or wisdom from any man who is capable of lending us either." Henry Fielding, Tom Jones

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Sanctions Upheld For Firm That Filed Audited Report By Non-PCAOB Member Accountant

Gremo Investments, Inc., Exchange Act Rel. 64481, May 12, 2011

Finra sanctioned Gremo for filing an annual report that was audited by an accounting firm that was not registered with the Public Company Accounting Oversight Board. Finra suspended the firm until it filed a compliant annual report and imposed a $1,000 fine. The Commission affirmed the Finra sanctions.

From 2003 until December 2008 the Commission exempted non-public broker-dealers such as Gremo from the requirement that their audits be performed by a PCAOB member accounting firm. Finra in 2009 issued two notices to members notifying them that the exemption had expired and that they were required to use PCAOB member firms for audits of their 2009 fiscal year. Gremo filed for an extension of the deadline for filing its annual audit claiming that the PCAOB application of its accounting firm was pending. Ultimately Gremo filed an audited annual report despite the fact that its accounting firm was not in fact a PCAOB member.