UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 92361 / July 9, 2021
ACCOUNTING AND AUDITING ENFORCEMENT
Release No. 4224 / July 9, 2021
ADMINISTRATIVE PROCEEDING
File No. 3-19767
In the Matter of
PLS, CPA, A PROFESSIONAL
CORPORATION, A/K/A PLS CPAs,
CHANG G. PARK, CPA, A/K/A
CHANGGEUN PARK,
JOSEPH YONGYUN LEE, CPA,
A/K/A YONG YUN LEE, and
JUCHI LEE, CPA, A/K/A
JUCHI LEE FERNANDEZ,
JU-CHI LEE, JU CHI LEE,
SUE LEE,
Respondents.
ORDER MAKING FINDINGS AND
IMPOSING REMEDIAL SANCTIONS AND
A CEASE-AND-DESIST ORDER
PURSUANT TO SECTIONS 4C AND 21C OF
THE SECURITIES EXCHANGE ACT OF
1934 AND RULE 102(e) OF THE
COMMISSION’S RULES OF PRACTICE
I.
On April 24, 2020, the Securities and Exchange Commission (“Commission”) instituted
public administrative and cease-and-desist proceedings against PLS, CPA, A Professional
Corporation, a/k/a PLS CPAs (“PLS”), Chang G. Park, CPA, a/k/a Changgeun Park (“Park”),
Joseph Yongyun Lee, CPA, a/k/a Yong Yun Lee (“Joseph Lee”), and Juchi Lee, CPA, a/k/a
Juchi Lee Fernandez, Ju-chi Lee, Ju Chi Lee, Sue Lee (“Juchi Lee”) (collectively, “Respondents”)
pursuant to Sections 4C1 and 21C of the Securities Exchange Act of 1934 (“Exchange Act”) and
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
2
Rule 102(e)(1)(ii) and 102(e)(1)(iii) of the Commission’s Rules of Practice.2 The Commission
now deems it appropriate to enter this Order Making Findings and Imposing Remedial Sanctions
and a Cease-and-Desist Order Pursuant to Sections 4C and 21C of the Exchange Act and Rule
102(e)(1)(ii) and 102(e)(1)(iii) of the Commission’s Rules of Practice against Respondents.
II.
Respondents have submitted Offers of Settlement (the “Offers”) 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 them and
the subject matter of these proceedings, which are admitted, and except as provided herein in
Section V, Respondents consent to the entry of this Order Making Findings and Imposing
Remedial Sanctions and a Cease-and-Desist Order Pursuant to Sections 4C and 21C of the
Securities Exchange Act of 1934 and Rule 102(e) of the Commission’s Rules of Practice
(“Order”), as set forth below.
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.
Rule 102(e)(1)(iii) 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
willfully violated, or willfully aided and abetted the violation of any provision of
the Federal securities laws or the rules and regulations thereunder.
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III.
On the basis of this Order and Respondents’ Offers, the Commission finds that:
A. SUMMARY
1. These proceedings involve violations of Exchange Act Rule 2-01(b)(1) of
Regulation S-X, 17 C.F.R. § 210.02 and Public Company Accounting Oversight Board
(“PCAOB”) Rules 3500T and 4006 in five audits performed by Respondents for four public
company issuers.
B. RESPONDENTS
2. PLS, CPA, A Professional Corporation (a/k/a “PLS CPAs”) (“PLS”), a California
corporation, is a PCAOB-registered public accounting firm based in San Diego, California. PLS
was incorporated in November 2009, and is co-owned by Park, Joseph Lee, and a third individual.
Park, Joseph Lee, and Juchi Lee are PLS’s only individuals who perform audit services
(collectively, the “individual auditors”).
3. Chang G. Park, CPA (a/k/a Changgeun Park) (“Park”), age 61, resides in San
Diego, California. Park is a certified public accountant licensed in California. Park is the
founder of Chang G. Park, C.P.A., A Professional Corporation, which later reincorporated as
PLS. Since November 2009, Park has been the managing partner and 55% co-owner of PLS,
and one of the firm’s three auditors.
4. Joseph Yongyun Lee, CPA (a/k/a Yong Yun Lee) (“Joseph Lee”), age 58, resides in
San Diego, California. Joseph Lee is a certified public accountant licensed in California. Joseph
Lee joined Chang G. Park, C.P.A. as an accountant in December 2003. Since November 2009,
Joseph Lee has been a partner, 25% co-owner, and the CFO of PLS, where he is one of the firm’s
three auditors.
5. Juchi Lee, CPA (a/k/a Juchi Lee Fernandez, Ju-chi Lee, Ju Chi Lee, Sue Lee)
(“Juchi Lee”), age 49, resides in San Diego, California. Juchi Lee is a certified public accountant
licensed in California. Juchi Lee joined Chang G. Park, C.P.A. as a senior auditor in October
2007. Since November 2009, Juchi Lee has been one of the three auditors at PLS.
C. OTHER RELEVANT ENTITIES
6. Interactive Multi-Media Auction Corporation (n/k/a Stop Sleep Go Inc.)
(“IMMA”), CIK# 0001565430, is a British Virgin Islands corporation with its principal place of
business in the United Kingdom, and has common stock registered pursuant to Section 12(g) of the
Exchange Act. IMMA was formerly headquartered in Hong Kong, and its stock was quoted on
OTC Link under the ticker symbol “IMMA.” In December 2016, IMMA entered into a business
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combination with another company and changed its name to “Stop Sleep Go Inc.” Its stock
currently is quoted on the OTC Link under the ticker symbol “SSGOF.”
7. IMMA has not filed any annual or quarterly periodic reports with the Commission
since 2016. The Commission filed an injunctive action against IMMA, SEC v. McDiarmid et al.,
Case 2:17-cv-07201 (C.D. Cal.), and, on November 19, 2018, obtained a default judgment
enjoining IMMA from violations of the antifraud provisions of the Securities Act and the
Exchange Act. SEC v. McDiarmid et al., 2018 WL 6062313 (C.D. Cal. Nov. 19, 2018). PLS
issued audit reports for IMMA’s Forms 10-K for the fiscal years ended October 31, 2014 and
October 31, 2015, and resigned as IMMA’s auditor on October 13, 2016.
8. IMK Group, Inc. (“IMKG”), CIK# 0001321710, is a Delaware corporation with its
principal place of business in Seoul, South Korea. IMKG had common stock registered pursuant
to Section 12(g) of the Exchange Act, which was quoted on OTC Link under the ticker symbol
“IMKG.”
9. IMKG has not filed any periodic reports with the Commission since 2016. The
Commission suspended trading in IMKG from September 25, 2017 through October 6, 2017 (In
the Matter of IMK Group, Inc., et al., Exchange Act Release No. 81691 (September 22, 2017)),
then revoked the registration of each class of registered securities of IMKG, effective April 16,
2019, for failure to file timely periodic reports with the Commission. In the Matter of IMK Group,
Inc., et al., Exchange Act Release No. 85648 (April 15, 2019). PLS issued an audit report for
IMKG’s Form 10-K for the fiscal year ended February 28, 2015.
10. RadTek, Inc. (“RDTK”), CIK# 0001487252, is a Nevada corporation with its
principal place of business in Louisville, Kentucky. RDTK had common stock registered pursuant
to Section 12(g) of the Exchange Act, which traded on the OTC Grey Market under the ticker
symbol “RDTK.”
11. RDTK has not filed any periodic reports with the Commission since 2016. The
Commission suspended trading in RDTK from August 28, 2019 through September 11, 2019 for
failure to file timely periodic reports with the Commission and failure to maintain a valid address
on file with the Commission (In the Matter of LD Holdings, Inc., et al., Exchange Act Release No.
86780 (August 27, 2019)), then revoked the registration of each class of registered securities of
RDTK, effective December 8, 2020, for failure to file timely periodic reports with the
Commission. In the Matter of LD Holdings, Inc., et al., Exchange Act Release No. 90588
(December 7, 2020). PLS issued audit reports for RDTK’s Forms 10-K for the fiscal years ended
December 31, 2013, December 31, 2014, and December 31, 2015.
12. Therapeutic Solutions International, Inc. (“TSOI”), CIK# 0001419051, is a Nevada
corporation with its principal place of business in Oceanside, California, and has common stock
registered pursuant to Section 12(g) of the Exchange Act which is quoted on OTC Link under the
ticker symbol “TSOI.” PLS issued audit reports for TSOI’s Forms 10-K for the fiscal years ended
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December 31, 2013, December 31, 2014, and December 31, 2015, and resigned as TSOI’s auditor
on or around October 31, 2016.
13. Each of the Respondents signed a tolling agreement with the Commission that
tolled and suspended the running of any applicable statute of limitations for the period beginning
on January 13, 2020 through July 13, 2020.
D. RESPONDENTS’ IMPROPER PROFESSIONAL CONDUCT
1. Respondents’ Audit Practice
14. In or around 2001, Park founded an audit firm, initially named Chang G. Park,
C.P.A. In November 2009, the firm was re-incorporated as PLS.
15. PLS currently provides audit and review services to microcap issuers, development
stage companies, and shell companies. Park, Joseph Lee, and Juchi Lee are the three individual
auditors who conduct PLS’s audits and reviews of public company financial statements.
16. PLS has never used any proprietary auditing software. The individual auditors use
downloads of commercially available electronic audit templates to document audits. The
individual auditors complete these templates electronically and/or print out hard copies to fill out
manually.
17. The individual auditors either save their electronic work papers on PLS’s
networked storage drive, or they save them in electronic client folders on their PLS computers
which are copied to PLS’s networked storage drive. Hard copies are printed out and assembled in
audit binders for the auditors’ review and signature; the resulting audit binders are then stored in
the individual auditors’ offices.
18. Joseph Lee and Juchi Lee are generally responsible for preparing PLS’s audit
documentation and assembling and storing the audit binders. Park generally reviews the audit
binders assembled by Joseph Lee or Juchi Lee.
19. As managing partner of the firm, Park manages the relationship of the firm with its
clients, while Joseph Lee and Juchi Lee perform most of the audit and review work. When matters
arise during a client’s audit, all three individual auditors typically meet to discuss the audit.
20. As of early 2016, PLS was providing audit and review services to approximately
thirty clients, including IMMA, IMKG, RDTK, and TSOI.
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2. The July 2016 Commission Subpoena and the November 2016 PCAOB
Inspection
21. On July 5, 2016, the Commission issued an administrative subpoena for documents
to PLS (the “July 2016 Commission Subpoena”). The subpoena included requests for IMMA audit
work papers created during, or concerning, the time period from September 30, 2014, to July 5,
2016.
22. PLS produced IMMA audit work papers in response to the July 2016 Commission
Subpoena. Juchi Lee was responsible for gathering and producing PLS’s documents in response to
the subpoena.
23. On April 1, 2016, the PCAOB informed PLS that it would conduct an inspection
of PLS during the week of November 7, 2016 (the “November 2016 PCAOB inspection”).
24. On April 12, 2016, a representative of the PCAOB emailed Park, cc’ing Joseph
Lee and Juchi Lee, requesting that PLS complete and return, prior to the inspection, an attached
“issuer information form.” The issuer information form required PLS to specify, among other
information, the engagement partner (“EP”) and engagement quality reviewer (“EQR”) assigned
to its client issuers.
25. Park asked Joseph Lee and Juchi Lee to fill out the issuer information form, for
Park’s review.
26. PLS sent the completed issuer information form back to the PCAOB on October
12, 2016. PLS subsequently amended the issuer information form to reflect the termination of its
auditor relationship with TSOI, sending a final version to the PCAOB on October 31, 2016. The
final version of the issuer information form PLS provided to the PCAOB included information
for twenty-nine issuers.
27. The final version of the issuer information form PLS provided to the PCAOB
identified the individual auditors’ roles on audits for issuers IMMA, IMKG, RDTK and TSOI as
follows:
Issuer EP EQR
IMMA Juchi Lee Park
IMKG Park Juchi Lee
RDTK Park Juchi Lee
TSOI Joseph Lee Juchi Lee
28. Park instructed Joseph Lee and Juchi Lee to review PLS’s clients’ audit binders in
preparation for the inspection.
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29. Before the November 2016 PCAOB inspection was scheduled to begin, the
PCAOB informed PLS that it would review the audit work papers for IMKG, RDTK and TSOI
during the inspection.
30. After learning which issuers were selected for the inspection, Park instructed
Joseph Lee and Juchi Lee to review the audit binders for those issuers again.
31. The PCAOB conducted its inspection of PLS from November 7, 2016 to
November 11, 2016.
3. Respondents Failed to Prepare and Retain Required Audit Documentation,
and Inappropriately Modified Audit Documentation, in Violation of PCAOB
Auditing Standard No. 33
32. Respondents violated PCAOB Auditing Standard No. 3, Audit Documentation
(“AS 3”), in that they: failed to timely prepare required audit documentation; failed to document
the addition of documents to the work papers after the documentation completion date; and drafted
back-dated, fraudulent work papers to create the appearance of having proper contemporaneous
work papers.
33. AS 3 establishes general requirements for documentation the auditor should prepare
and retain in connection with engagements conducted pursuant to the standards of the PCAOB.
AS 3.1, AS 3.4. Audit documentation is the written record of the basis for the auditor’s
conclusions that provides the support for the auditor’s representations, whether those
representations are contained in the auditor’s report or otherwise. AS 3.2. Audit documentation
also facilitates the planning, performance, and supervision of the engagement, and is the basis for
the review of the quality of the work because it provides the reviewer with written documentation
of the evidence supporting the auditor’s significant conclusions. Id.
34. Among other things, audit documentation includes records of the planning and
performance of the work, the procedures performed, evidence obtained, and conclusions reached
by the auditor. AS 3.2. The auditor also must identify all significant findings or issues in an
engagement completion document. AS 3.13.
35. The report release date is the date the auditor grants permission to use the auditor’s
report in connection with the issuance of the company’s financial statements. AS 3.14. Prior to
the report release date, the auditor must have completed all necessary auditing procedures and
obtained sufficient evidence to support the representations in the auditor’s report. AS 3.15. A
3 PCAOB Auditing Standard No. 3 was renumbered from AS 3 to AS 1215, effective
December 31, 2016; references herein are to the numbering in effect at the time of the alleged
conduct.
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complete and final set of audit documentation should be assembled for retention as of a date not
more than 45 days after the report release date (the “documentation completion date”). Id.
36. Circumstances may require additions to audit documentation after the report release
date. AS 3.16. Audit documentation must not be deleted or discarded after the documentation
completion date, however, information may be added. Id. Any documentation added must
indicate the date the information was added, the name of the person who prepared the additional
documentation, and the reason for adding it. Id.
37. Because PLS did not use automated auditing software, it was up to the individual
auditors themselves to keep track of what audit work had been performed, and when, and to ensure
that the audit documentation for each audit was completed by the 45-day documentation
completion date, as required by AS 3.15.
38. The individual auditors were aware that PLS commonly lacked a complete audit
binder for its clients’ audits.
a. Park noticed missing work papers when reviewing audits; reprimanded
Joseph Lee for missing documentation; and told Juchi Lee that Joseph Lee’s
work papers were incomplete.
b. Juchi Lee acknowledged that prior to the November 2016 PCAOB
inspection, the individual auditors were less “serious” about complying with
the audit documentation completion period, which she understood to be “45
days or 60 days.”
c. Joseph Lee admitted that he was unaware of the 45 day audit documentation
completion period before the November 2016 PCAOB inspection.
39. PLS and the individual auditors inappropriately added documents to audit work
papers after the audit report had been released and the applicable documentation completion date
had passed, without disclosing the date that these documents were added, or other information
required under AS 3.16. In certain instances, the individual auditors identified documents that
were missing from the audit work papers, then intentionally prepared and backdated those
documents in order to make it appear as though those documents had been prepared and included
in the audit work papers on or before the date of the corresponding PLS audit report.
PLS subsequently produced backdated documents in response to the July 2016 Commission
Subpoena and/or the November 2016 PCAOB inspection.
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40. PLS and the individual auditors knew or were reckless in not knowing that they
inappropriately added documents to audit work papers and backdated audit work papers.
a. IMMA Audits – Fiscal Years Ended October 31, 2014 and 2015
41. PLS performed the audit for IMMA’s fiscal year ended October 31, 2014 (the
“IMMA 2014 audit”). IMMA filed the PLS audit report, dated February 12, 2014,4 with its Form
10-K on February 12, 2015. The audit report stated that PLS had conducted the audit in
accordance with PCAOB standards. The applicable documentation completion date was March
29, 2015.
42. PLS also performed the audit for IMMA’s fiscal year ended October 31, 2015 (the
“IMMA 2015 audit”). IMMA filed the PLS audit report, dated February 10, 2016, with its Form
10-K on February 10, 2016. The audit report stated that PLS had conducted the audit in
accordance with PCAOB standards. The applicable documentation completion date was
March 26, 2016.
43. The issuer information form that PLS provided to the PCAOB in connection with
the November 2016 PCAOB inspection described Juchi Lee as the EP for IMMA, and Park as the
EQR.
44. Juchi Lee was the lead auditor for the IMMA 2014 audit and the IMMA 2015 audit.
Park reviewed the audit binders for these audits. Each of them knew or were reckless in not
knowing that the IMMA 2014 audit and the IMMA 2015 audit had not actually been conducted in
accordance with PCAOB standards.
45. The July 2016 Commission Subpoena required PLS to produce IMMA audit work
papers for the time period from September 30, 2014, to July 5, 2016, which included both the
IMMA 2014 audit and the IMMA 2015 audit. After PLS received the July 2016 Commission
Subpoena on or around July 5, 2016, Juchi Lee prepared and backdated documents for both the
IMMA 2014 audit and the IMMA 2015 audit.
46. Specifically, after PLS received the July 2016 Commission Subpoena on or around
July 5, 2016, Juchi Lee prepared an audit form entitled “Inquiries of Management/Directors about
the Risks of Fraud” for the IMMA 2014 audit. Juchi Lee admitted that she had searched the
IMMA 2015 audit work papers for that audit’s version of the same form; hand copied the
responses from that version onto a blank form, which she then signed and backdated to make it
look like it had been prepared in 2015; and produced the backdated form to the Commission along
with the IMMA 2014 audit work papers.
4 The February 12, 2014 date on the PLS audit report appears to have been a typo, as the
report was for the fiscal year ended October 31, 2014, and was filed with IMMA’s Form 10-K on
February 12, 2015.
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47. Or around July 21, 2016, Juchi Lee also prepared an “Engagement Acceptance and
Continuance” form for the IMMA 2014 audit and backdated this document to December 1, 2014,
approximately two months before the date of the corresponding PLS audit report, which was
February 12, 2015. This document, which was filled out electronically prior to printing, included
the names of both Juchi Lee (as “Lead Partner”) and Park (as “Concurring Partner”) next to the
date December 1, 2014. Juchi Lee admitted that she had created this document after reviewing the
audit work papers in July 2016.
48. On or around July 27, 2016, Juchi Lee prepared a form entitled “Engagement
Completion Document” for the IMMA 2015 audit and backdated this document to February 10,
2016, the date of the corresponding PLS audit report. The hard copy version of this form included
handwritten signatures from both Juchi Lee and Park, which also were backdated to February 10,
2016. Park admitted that his signature on this document was backdated.
b. IMKG Audit – Fiscal Year Ended February 28, 2015
49. PLS performed the audit for IMKG’s fiscal year ended February 28, 2015 (the
“IMKG 2015 audit”). IMKG filed the PLS audit report, dated July 29, 2015, with its Form 10-K
on July 29, 2015. The audit report stated that PLS had conducted the audit in accordance with
PCAOB standards. The applicable documentation completion date was September 12, 2015.
50. The issuer information form that PLS provided to the PCAOB in connection with
the November 2016 PCAOB inspection listed Park as the engagement partner for IMKG, and
Juchi Lee as the EQR.
51. However, Park and Joseph Lee each admitted that they went together to Korea to
conduct field work for the audit. Joseph Lee prepared most of the audit work papers for IMKG,
which Park reviewed. Each of them knew or were reckless in not knowing that the IMKG 2015
audit had not actually been conducted in accordance with PCAOB standards.
52. The PCAOB reviewed audit work papers for the IMKG 2015 audit in connection
with the November 2016 PCAOB inspection.
53. Both Park and Joseph Lee admitted that in October 2016, in the course of
preparing for the November 2016 PCAOB inspection, they had become aware that Joseph Lee
had failed to obtain all of the documents necessary for the IMKG 2015 audit.
54. With Park’s knowledge, Joseph Lee emailed IMKG’s former owner and outside
consultants to request board minutes, bank reconciliations, and other documents, in an attempt to
complete the audit binder before the PCAOB inspection.
55. Joseph Lee also prepared and backdated documents for the IMKG 2015 audit in
preparation for the November 2016 PCAOB inspection. PLS produced backdated documents for
the IMKG 2015 audit to the PCAOB in connection with the November 2016 PCAOB inspection.
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56. On or around October 12, 2016, Joseph Lee prepared a document entitled “Audit
Program for General Planning Procedures” for the IMKG 2015 audit. Joseph Lee admitted that
he had created this document after the audit report date, in preparation for the November 2016
PCAOB inspection.
57. On or around October 12 or 13, 2016, Joseph Lee also prepared a form entitled
“Engagement Completion Document” for the IMKG 2015 audit, and backdated it to July 29,
2015, the date of the corresponding PLS audit report. This document, which was filled out
electronically prior to printing, included the names of Joseph Lee (as “Engagement Manager”),
Park (as “Engagement Partner”), and Juchi Lee (as “Concurring Partner/Engagement Quality
Reviewer”) next to the date July 29, 2015. Joseph Lee admitted that this document had not been
prepared before the audit report was issued, and that he had backdated this document to the audit
report date.
58. On or around October 14, 2016, Joseph Lee prepared a “Risk Assessment
Summary Form” for the IMKG 2015 audit, and backdated it to July 9, 2015, a few weeks prior to
the date of the corresponding PLS audit report. Joseph Lee admitted that he had created this
document after the audit report date, in preparation for the November 2016 PCAOB inspection.
c. RDTK Audit – Fiscal Year Ended December 31, 2015
59. PLS performed the audit for RDTK’s fiscal year ended December 31, 2015 (the
“RDTK 2015 audit”). RDTK filed the PLS audit report, dated April 27, 2016, with its Form 10-
K on April 27, 2016. The audit report stated that PLS had conducted the audit in accordance
with PCAOB standards. The applicable documentation completion date was June 11, 2016.
60. RDTK filed an amended Form 10-K for its fiscal year 2015 on August 24, 2016.
The Amended RDTK Form 10-K included a PLS audit report that was amended as to one note
only; that report was dual dated related to the one note for August 22, 2016. The audit report
stated that PLS had conducted the audit in accordance with PCAOB standards. The applicable
documentation completion date was October 6, 2016.
61. The issuer information form that PLS provided to the PCAOB in advance of the
November 2016 PCAOB inspection listed Park as the engagement partner for RDTK, and
Juchi Lee as EQR.
62. However, Park and Joseph Lee conducted the fieldwork for RDTK. Joseph Lee
prepared most of the audit work papers for RDTK, which Park reviewed. Each of them knew or
were reckless in not knowing that the RDTK 2015 audit had not actually been conducted in
accordance with PCAOB standards.
63. The PCAOB reviewed audit work papers for the RDTK 2015 audit in connection
with the November 2016 PCAOB inspection.
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64. Joseph Lee admitted that he had contacted RDTK after the audit report was
released to request supporting documentation that was missing from the audit binders.
65. Joseph Lee also prepared and backdated documents for the RDTK 2015 audit in
preparation for the November 2016 PCAOB inspection. PLS produced backdated documents for
the RDTK 2015 audit to the PCAOB in connection with the November 2016 PCAOB inspection.
66. On or around October 18, 2016, Joseph Lee prepared a document entitled “Audit
Program for General Planning Procedures” for the RDTK 2015 audit. Joseph Lee admitted that
he had noticed this document was missing from the audit work papers and that he had created
this document in preparation for the November 2016 PCAOB inspection.
67. On or around October 19, 2016, Joseph Lee also prepared a “Supervision, Review
and Approval Form” for the RDTK 2015 audit and backdated it to April 27, 2016, the date of the
original PLS audit report. This document, which was filled out electronically prior to printing,
included the typed “signatures” of Joseph Lee (under the “Detailed Review” section supposed to
be “performed by the staff in charge of the field work”), Park (as “Engagement Partner”), and
Juchi Lee (as “Engagement Quality Reviewer”) next to the date April 27, 2016. Joseph Lee
admitted that he had created this document in preparation for the November 2016 PCAOB
inspection. Park also admitted that this document was created in October 2016 to supplement the
audit work papers, and backdated.
68. In addition, on or around October 19, 2016, Joseph Lee prepared an “Engagement
Completion Document” for the RDTK 2015 audit, and backdated it to April 27, 2016, the
original report release date. This document, which was filled out electronically prior to printing,
included the names of Joseph Lee (as “Engagement Manager”), Park (as “Engagement Partner”),
and Juchi Lee (as “Concurring Partner/Engagement Quality Reviewer”) next to the date April 27,
2016. Joseph Lee admitted that he had created this document in October 2016 in preparation for
the November 2016 PCAOB inspection. Park also admitted that this document was created in
October 2016 to supplement the audit work papers, and backdated.
d. TSOI Audit – Fiscal Year Ended December 31, 2014
69. PLS performed the audit for TSOI’s fiscal year ended December 31, 2014 (the
“TSOI 2014 audit”). TSOI filed the PLS audit report, dated June 15, 2016, with its Form 10-K
on June 16, 2016. The audit report stated that PLS had conducted the audit in accordance with
PCAOB standards. The applicable documentation completion date was July 30, 2016.
70. The issuer information form that PLS provided to the PCAOB in connection with
the November 2016 PCAOB inspection listed Joseph Lee as the engagement partner for TSOI,
and Juchi Lee as the EQR.
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71. However, Joseph Lee performed the substantive audit work for TSOI, including
preparation of the audit binder, and Park served as the reviewer. Each of them knew or were
reckless in not knowing that the TSOI 2014 audit had not actually been conducted in accordance
with PCAOB standards.
72. Juchi Lee did not perform an engagement quality review for TSOI. In fact, Juchi
Lee admitted that she had not performed engagement quality reviews for IMKG, RDTK, or
TSOI, even though the issuer information form that PLS provided to the PCAOB in advance of
the November 2016 PCAOB inspection listed her as the EQR for each of these issuers.
73. The PCAOB reviewed audit work papers for the TSOI 2014 audit in connection
with the November 2016 PCAOB inspection.
74. Joseph Lee admitted that he did not fill out audit documentation forms for the
TSOI 2014 audit until the fall of 2016, when he was reviewing audit binders in preparation for
the November 2016 PCAOB inspection.
75. Joseph Lee prepared and backdated documents for the TSOI 2014 audit in
preparation for the November 2016 PCAOB inspection. PLS produced backdated documents for
the TSOI 2014 audit to the PCAOB in connection with the November 2016 PCAOB inspection.
76. Sometime between October 24 and November 1, 2016, Joseph Lee prepared a
document entitled “Audit Program for General Planning Procedures” for the TSOI 2014 audit.
Joseph Lee admitted that he had created this document several months after the TSOI 2014 Form
10-K had been filed, in preparation for the November 2016 PCAOB inspection.
77. Sometime between October 24 and November 1, 2016, Joseph Lee also prepared
a document entitled “Risk Assessment Summary Form” for the TSOI 2014 audit. This
document, which was filled out electronically prior to printing, included the names of Joseph Lee
and Juchi Lee next to the date January 7, 2016, which was several months prior to the date of the
corresponding PLS audit report.
78. In addition, on or around October 31 or November 1, 2016, Joseph Lee prepared a
“Supervision, Review and Approval Form” for the TSOI 2014 audit. This document, which was
filled out electronically prior to printing, included the names of Joseph Lee (as “Engagement
Partner”) and Juchi Lee (as “Engagement Quality Reviewer”) next to the date June 15, 2016, the
date of the corresponding PLS audit report.
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4. Respondents Failed to Obtain or Perform Engagement Quality Reviews in
Violation of PCAOB Auditing Standard No. 7 5
79. Respondents violated PCAOB Auditing Standard No. 7, Engagement Quality
Review (“AS 7”), by failing to obtain or perform adequate engagement quality reviews in
connection with PLS’s clients’ audits.
80. AS 7 requires an engagement quality review and concurring approval of issuance
for each audit engagement conducted pursuant to the standards of the PCAOB. AS 7.1. The
objective of the EQR is to perform an evaluation of the significant judgments made by the
engagement team and the related conclusions reached in forming the overall conclusion on the
engagement and in preparing the engagement report, if a report is to be issued, in order to
determine whether to provide concurring approval of issuance. AS 7.2. To evaluate such
judgments and conclusions, the EQR to the extent necessary should hold discussions with the
engagement partner and other members of the engagement team, and review documentation.
AS 7.9.
81. The EQR must be an associated person of a registered public accounting firm.
AS 7.3. An EQR from the firm that issues the engagement report must be a partner or another
individual in an equivalent position. Id. The EQR may also be an individual from outside the
firm. Id. To maintain objectivity, the EQR and others who assist the EQR should not make
decisions on behalf of the engagement team or assume any of the responsibilities of the
engagement team. AS 7.7.
82. In an audit, the EQR should evaluate, among other things, the significant
judgments that relate to engagement planning, including consideration of the firm’s recent
engagement experience with the company and risks identified in connection with the firm’s
client acceptance and retention process. AS 7.10. The EQR also should evaluate the
engagement team’s assessment of, and audit responses to, significant risks identified by the
engagement team, including fraud risks, and other significant risks identified by the EQR. Id.
The EQR’s review of documentation should specifically include the engagement completion
document. Id.
83. Additionally, in an audit, the EQR should evaluate whether the engagement
documentation that he or she reviewed indicates that the engagement team responded
appropriately to significant risks, and supports the conclusions reached by the engagement team
with respect to the matters reviewed. AS 7.11. The EQR may provide concurring approval of
issuance only if, after performing with due professional care the review required by AS 7, he or
she is not aware of a significant engagement deficiency, such as a failure by the engagement
5 PCAOB Auditing Standard No. 7 was renumbered from AS 7 to AS 1220, effective
December 31, 2016; references herein are to the numbering in effect at the time of the alleged
conduct.
15
team to obtain sufficient appropriate evidence in accordance with the standards of the PCAOB.
AS 7.12. The audit firm may grant permission to the client to use the engagement report only
after the EQR provides concurring approval of issuance. AS 7.13.
84. The issuer information form that PLS provided to the PCAOB in advance of the
November 2016 PCAOB inspection represented that Park was the EQR for IMMA, and Juchi
Lee was the EQR for IMKG, RDTK, and TSOI. PLS, however, was not actually staffing its
audits in this manner.
85. PLS and the individual auditors violated AS 7 by failing to obtain or perform
adequate engagement quality reviews, in accordance with the requirements of AS 7, for the
IMMA 2014 audit; the IMMA 2015 audit; the IMKG 2015 audit; the RDTK 2015 audit; and the
TSOI 2014 audit.
86. Juchi Lee, the purported EQR for the IMKG 2015 audit, the RDTK 2015 audit,
and the TSOI 2014 audit, admitted that she had not performed engagement quality reviews for
IMKG, RDTK, or TSOI. She also admitted that she had not even known that she was supposed
to be EQR for these issuers until October 2016, when Park tasked her and Joseph Lee with the
job of completing the issuer information form for the PCAOB in connection with the
November 2016 PCAOB inspection.
87. Moreover, given the audit documentation deficiencies described above, PLS and
the individual auditors could not have obtained or performed engagement quality reviews, in
accordance with the requirements of AS 7, for the IMMA 2014 audit, the IMMA 2015 audit,
the IMKG 2015 audit, the RDTK 2015 audit, or the TSOI 2014 audit. The documents that were
inappropriately added to audit work papers, after the audit report had been released and the
applicable documentation completion date had passed, included engagement acceptance, audit
planning, risk assessment, engagement completion, and other documents that an EQR
performing an engagement quality review pursuant to the standards of AS 7 should have
reviewed before providing approval for the audit report to be released.
88. Respondents knew or were reckless in not knowing that they had failed to obtain
or perform engagement quality reviews, in accordance with the requirements of AS 7, for the
IMMA 2014 audit; the IMMA 2015 audit; the IMKG 2015 audit; the RDTK 2015 audit; and the
TSOI 2014 audit.
16
5. Respondents Failed to Exercise Due Professional Care in Violation of
PCAOB Interim Auditing Standard No. 2306
89. Respondents violated PCAOB Interim Auditing Standard No. 230,
Due Professional Ca re in the Performance of Work (“AU 230”), by failing to exercise due
professional care in connection with the IMMA 2014 audit; the IMMA 2015 audit; the IMKG
2015 audit; the RDTK 2015 audit; and the TSOI 2014 audit. Namely, Respondents failed to
prepare and retain required audit documentation and produced backdated documents to the
PCAOB and the Commission, and they failed to obtain and perform engagement quality
reviews.
90. AU 230 requires an auditor to exercise due professional care in the planning and
performance of the audit and the preparation of the report. AU 230.01 - 230.02. Due
professional care imposes a responsibility upon each professional within an independent
auditor’s organization to observe the standards of field work and reporting. AU 230.02.
91. The matter of due professional care concerns what the independent auditor does
and how well he or she does it. AU 230.04. An auditor should possess “the degree of skill
commonly possessed” by other auditors and should exercise it with “reasonable care and
diligence” (that is, with due professional care). AU 230.05. The engagement partner should
know, at a minimum, the relevant professional accounting and auditing standards and should be
knowledgeable about the client. AU 230.06.
92. Due professional care requires the auditor to exercise professional skepticism.
AU 230.07. Professional skepticism is an attitude that includes a questioning mind and a
critical assessment of audit evidence. Id. The auditor uses the knowledge, skill, and ability
called for by the profession of public accounting to diligently perform, in good faith and with
integrity, the gathering and objective evaluation of evidence. Id. Gathering and objectively
evaluating audit evidence requires the auditor to consider the competency and sufficiency of the
evidence. AU 230.08. Since evidence is gathered and evaluated throughout the audit,
professional skepticism should be exercised throughout the audit process. Id.
93. PLS and the individual auditors failed to exercise due professional care in
connection with the audit documentation for the IMMA 2014 audit; the IMMA 2015 audit; the
IMKG 2015 audit; the RDTK 2015 audit; and the TSOI 2014 audit.
94. As described above, PLS and the auditors failed to prepare and retain required
audit documentation for these audits, as required by AS 3. Although all three of the individual
auditors were aware that PLS had a problem with missing work papers, they did not take any
6 PCAOB Interim Auditing Standard No. 230 was renumbered from AU 230 to AS 1015,
effective December 31, 2016; references herein are to the numbering in effect at the time of the
alleged conduct.
17
action to remedy this problem until the July 2016 Commission Subpoena and the announcement
of the November 2016 PCAOB inspection threatened to expose their audit deficiencies.
95. Even then, Respondents did not follow the requirements for adding audit
documentation set forth in AS 3.16, but intentionally attempted to conceal their actions from the
Commission and the PCAOB by retroactively completing and backdating documents, which
PLS then produced to the Commission or the PCAOB.
96. PLS and the individual auditors also failed to exercise due professional care in
connection with engagement quality reviews for the IMMA 2014 audit; the IMMA 2015 audit;
the IMKG 2015 audit; the RDTK 2015 audit; and the TSOI 2014 audit. PLS and the individual
auditors issued audit reports and provided information to the PCAOB, representing that
engagement quality reviews had been obtained or performed for each of these audits, when in
fact they had failed to obtain or perform engagement quality review, in accordance with the
requirements of AS 7, for each of these audits.
97. Respondents knew or were reckless in not knowing that they failed to exercise
due professional care in connection with the IMMA 2014 audit; the IMMA 2015 audit; the
IMKG 2015 audit; the RDTK 2015 audit; and the TSOI 2014 audit.
6. Respondents Willfully Violated PCAOB Rules 3500T and 4006
98. PCAOB Rule 3500T, Interim Ethics and Independence Standards (“Rule
3500T”), requires a registered public accounting firm and its associated persons to comply with
AICPA’s Code of Professional Conduct Rule 102 in connection with the preparation or issuance
of any audit report. Rule 3500T(a).7
99. AICPA’s Code of Professional Conduct Rule 102, Integrity and Objectivity
(“AICPA Rule 102”) mandates that “in the performance of any professional service, a member
shall maintain objectivity and integrity.” AICPA Rule 102.01. The AICPA Code of
Professional Conduct defines “professional services” as including “all services requiring
accountancy or related skills performed by a member for a client, an employer, or on a volunteer
basis. These services include, but are not limited to accounting, audit and other attest services,
tax, bookkeeping, management consulting, financial management, corporate governance,
personal financial planning, business valuation, litigation support, educational, and those services
for which standards are promulgated by bodies designated by [the AICPA Council].” AICPA
Code of Professional Conduct § 0.400.40.
7 The rule requires auditors to comply with the AICPA’s Code of Professional Conduct
Rule 102, and interpretations and rulings thereunder, as in existence on April 16, 2003.
Although PCAOB Rule 3500T references the AICPA Code as in existence on April 16, 2003, the
definition of integrity remains identical to the current definitions in the Code of Professional
Conduct promulgated by the AICPA and applicable to current members of the AICPA.
18
100. PLS and the individual auditors willfully violated Rule 3500T because they failed
to act with integrity in connection with the preparation and issuance of the audit reports for the
IMMA 2014 audit; the IMMA 2015 audit; the IMKG 2015 audit; the RDTK 2015 audit; and the
TSOI 2014 audit.
101. PLS and the individual auditors further demonstrated a lack of integrity by taking
affirmative steps to conceal their auditing deficiencies from us and the PCAOB, including the
preparation and backdating of additional audit documentation which was subsequently produced
to us and/or the PCAOB.
102. PCAOB Rule 4006, Duty to Cooperate with Inspectors (“Rule 4006”), requires a
public accounting firm and its associated persons to cooperate with the Board in the performance
of any Board inspection. Cooperation includes, but it is not limited to, cooperating and complying
with any request made by the PCAOB to “provide access to, and the ability to copy, any record in
the possession, custody, or control of such firm or person.” See Rule 4006(a). “Implicit in this
cooperation requirement is that auditors provide accurate and truthful information.” In the Matter
of the Application of Kabani & Company, Inc., et al., Exchange Act Release No. 80201, at 13-14
(March 10, 2017) (Commission Opinion).
103. PLS and the individual auditors willfully violated Rule 4006 in connection with the
November 2016 PCAOB inspection by providing to the PCAOB documents that had been added to
audit work papers for the IMKG 2015 audit, the RDTK 2015 audit, and the TSOI 2014 audit, after
the audit report for each of these audits had been released and the applicable documentation
completion date had passed, without disclosing of the date that these documents were added to the
work papers, the persons who did so, or the reasons for doing so, as required under AS 3.
104. Moreover, PLS and the individual auditors attempted to deceive the PCAOB by
backdating documents so that it would appear as though these documents had been prepared and
included in the audit work papers before the audit report had been released.
E. VIOLATIONS
a. As a result of the conduct described above, PLS engaged in improper
professional conduct within the meaning of Section 4C(a)(2) of the
Exchange Act and Rule 102(e)(1)(ii) of the Commission’s Rules of
Practice by engaging in repeated instances of unreasonable conduct
and/or engaging in intentional or knowing conduct, including reckless
conduct, and willfully violated the federal securities laws within the
meaning of Section 4C(a)(3) of the Exchange Act and Rule 102(e)(1)(iii)
of the Commission’s Rules of Practice, by willfully violating Rule 2-
02(b)(1) of Regulation S-X, and willfully violating PCAOB Rule 3500T
and PCAOB Rule 4006.
19
b. As a result of the conduct described above, Park engaged in improper
professional conduct within the meaning of Section 4C(a)(2) of the
Exchange Act and Rule 102(e)(1)(ii) of the Commission’s Rules of
Practice by engaging in repeated instances of unreasonable conduct
and/or engaging in intentional or knowing conduct, including reckless
conduct, and willfully violated or willfully aided and abetted violation of
the federal securities laws within the meaning of Section 4C(a)(3) of the
Exchange Act and Rule 102(e)(1)(iii) of the Commission’s Rules of
Practice, by willfully aiding and abetting and causing PLS’s violations of
Rule 2-02(b)(1) of Regulation S-X, and by willfully violating PCAOB
Rule 3500T and PCAOB Rule 4006.
c. As a result of the conduct described above, Joseph Lee engaged in
improper professional conduct within the meaning of Section 4C(a)(2) of
the Exchange Act and Rule 102(e)(1)(ii) of the Commission’s Rules of
Practice by engaging in repeated instances of unreasonable conduct
and/or engaging in intentional or knowing conduct, including reckless
conduct, and willfully violated or willfully aided and abetted violation of
the federal securities laws within the meaning of Section 4C(a)(3) of the
Exchange Act and Rule 102(e)(1)(iii) of the Commission’s Rules of
Practice, by willfully aiding and abetting and causing PLS’s violations of
Rule 2-02(b)(1) of Regulation S-X, and by willfullly violating PCAOB
Rule 3500T and PCAOB Rule 4006.
d. As a result of the conduct described above, Juchi Lee engaged in
improper professional conduct within the meaning of Section 4C(a)(2) of
the Exchange Act and Rule 102(e)(1)(ii) of the Commission’s Rules of
Practice by engaging in repeated instances of unreasonable conduct
and/or engaging in intentional or knowing conduct, including reckless
conduct, and willfully violated or willfully aided and abetted violation of
the federal securities laws within the meaning of Section 4C(a)(3) of the
Exchange Act and Rule 102(e)(1)(iii) of the Commission’s Rules of
Practice, by willfully aiding and abetting and causing PLS’s violations of
Rule 2-02(b)(1) of Regulation S-X, and by willfully violating PCAOB
Rule 3500T and PCAOB Rule 4006.
F. FINDINGS
a. Based on the foregoing, the Commission finds that Respondents engaged in
improper professional conduct within the meaning of Section 4C(a)(2) of
the Exchange Act and Rule 102(e)(1)(ii) of the Commission’s Rules of
Practice.
20
b. Based on the foregoing, the Commission finds that Respondent PLS
willfully violated Rule 2-02(b)(1) of Regulation S-X; Respondents Park,
Joseph Lee and Juchi Lee willfully aided and abetted and caused PLS’s
violations of Rule 2-02(b)(1) of Regulation S-X; and Respondents willfully
violated PCAOB Rules 3500T and 4006.
Disgorgement and Civil Penalties
The disgorgement and prejudgment interest ordered in paragraph IV.N is consistent with
equitable principles and does not exceed Respondent PLS’s net profits from its violations and
will be distributed to harmed investors, if feasible. The Commission will hold funds paid
pursuant to paragraph IV.N in an account at the United States Treasury pending a decision
whether the Commission in its discretion will seek to distribute funds. If a distribution is
determined feasible and the Commission makes a distribution, upon approval of the distribution
final accounting by the Commission, any amounts remaining that are infeasible to return to
investors, and any amounts returned to the Commission in the future that are infeasible to return
to investors, may be transferred to the general fund of the U.S. Treasury, subject to Section
21F(g)(3) of the Exchange Act.
IV.
In view of the foregoing, the Commission deems it appropriate to impose the sanctions
agreed to in Respondents’ Offers.
Accordingly, it is hereby ORDERED, effective immediately, that:
A. Respondents PLS, Park, Joseph Lee and Juchi Lee shall cease and desist from
committing or causing any violations and any future violations of Exchange Act Rule 2-02(b)(1) of
Regulation S-X and PCAOB Rules 3500T and 4006.
B. Respondent PLS is denied the privilege of appearing or practicing before the
Commission as an accountant.
C. After five years from the date of this Order, PLS may request that the
Commission consider its reinstatement by submitting an application (attention: Office of the
Chief Accountant) to resume appearing or practicing before the Commission as:
1. a preparer or reviewer, or a person responsible for the preparation or
review, of any public company’s financial statements that are filed with
the Commission. Such an application must satisfy the Commission that
PLS’s work in its practice before the Commission will be reviewed either
by the independent audit committee of the public company for which it
works or in some other acceptable manner, as long as it practices before
the Commission in this capacity; and/or
21
2. an independent accountant.
Such an application must satisfy the Commission that:
(a) PLS is registered with the Public Company Accounting Oversight
Board (“Board”) in accordance with the Sarbanes-Oxley Act of
2002, and such registration continues to be effective. However, if
registration with the Board is dependent upon reinstatement by the
Commission, the Commission will consider the application on its
other merits;
(b) PLS hired an independent CPA consultant (“consultant”) who is
not unacceptable to the staff of the Commission and is affiliated
with a public accounting firm registered with the Board, that has
conducted a review of PLS’s quality control system and submitted
to the staff of the Commission a report that describes the review
conducted and procedures performed, and represents that the
review did not identify any criticisms of or potential defects in the
Firm’s quality control system that would indicate that any of PLS’s
employees will not receive appropriate supervision. PLS agrees to
require the consultant, if and when retained, to enter into an
agreement that provides that for the period of review and for a
period of two years from completion of the review, the consultant
shall not enter into any employment, consultant, attorney-client,
auditing or other professional relationship with PLS, or any of its
present or former affiliates, directors, officers, employees, or
agents acting in their capacity. The agreement will also provide
that the consultant will require that any firm with which he/she is
affiliated or of which he/she is a member, and any person engaged
to assist the consultant in performance of his/her duties under this
Order shall not, without prior consent of the staff, enter into any
employment, consultant, attorney-client, auditing or other
professional relationship with PLS, or any of its present or former
affiliates, directors, officers, employees, or agents acting in their
capacity as such for the period of the review and for a period of
two years after the review;
(c) PLS has resolved all disciplinary issues with the Board, and has
complied with all terms and conditions of any sanctions imposed
by the Board (other than reinstatement by the Commission); and
(d) PLS acknowledges its responsibility, as long as it appears or
practices before the Commission as an independent accountant, to
22
comply with all requirements of the Commission and the Board,
including, but not limited to, all requirements relating to
registration, inspections, engagement quality reviews, and quality
control standards.
D. The Commission will consider an application by PLS to resume appearing or
practicing before the Commission provided that its state CPA license is current and it has
resolved all other disciplinary issues with the applicable state boards of accountancy. However,
if state licensure is dependent on reinstatement by the Commission, the Commission will
consider an application on its other merits. The Commission’s review may include consideration
of, in addition to the matters referenced above, any other matters relating to PLS’s character,
integrity, professional conduct, or qualifications to appear or practice before the Commission as
an accountant. Whether an application demonstrates good cause will be considered on a facts
and circumstances basis with due regard for protecting the integrity of the Commission’s
processes.
E. Respondent Park is denied the privilege of appearing or practicing before the
Commission as an accountant.
F. After five years from the date of this Order, Park may request that the
Commission consider his reinstatement by submitting an application (attention: Office of the
Chief Accountant) to resume appearing or practicing before the Commission as:
1. a preparer or reviewer, or a person responsible for the preparation or review,
of any public company’s financial statements that are 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 Securities Exchange Act of 1934). Such
an application must satisfy the Commission that Park’s work in his practice
before the Commission as an accountant will be reviewed either by the
independent audit committee of the public company for which he works or
in some other acceptable manner, as long as he practices before the
Commission in this capacity; and/or
2. a preparer or reviewer, or a person responsible for the preparation or review,
of any public company’s financial statements that are filed with the
Commission as a member of an audit committee, as that term is defined in
Section 3(a)(58) of the Securities Exchange Act of 1934. Such an
application will be considered on a facts and circumstances basis with
respect to such membership, and the applicant’s burden of demonstrating
good cause for reinstatement will be particularly high given the role of the
audit committee in financial and accounting matters; and/or
3. an independent accountant.
23
Such an application must satisfy the Commission that:
(a) Park, or the public accounting firm with which he is associated, is
registered with the Board in accordance with the Sarbanes-Oxley
Act of 2002, and such registration continues to be effective;
(b) Park, or the registered public accounting firm with which he is
associated, has been inspected by the Board and that inspection did
not identify any criticisms of or potential defects in the
respondent’s or the firm’s quality control system that would
indicate that Park will not receive appropriate supervision;
(c) Park has resolved all disciplinary issues with the Board, and has
complied with all terms and conditions of any sanctions imposed
by the Board (other than reinstatement by the Commission); and
(d) Park acknowledges his responsibility, as long as he appears or
practices before the Commission as an independent accountant, to
comply with all requirements of the Commission and the Board,
including, but not limited to, all requirements relating to
registration, inspections, engagement quality reviews, and quality
control standards.
G. The Commission will consider an application by Park to resume appearing or
practicing before the Commission provided that his state CPA license is current and he has
resolved all other disciplinary issues with the applicable state boards of accountancy. However,
if state licensure is dependent on reinstatement by the Commission, the Commission will
consider an application on its other merits. The Commission’s review may include consideration
of, in addition to the matters referenced above, any other matters relating to Park ’s character,
integrity, professional conduct, or qualifications to appear or practice before the Commission as
an accountant. Whether an application demonstrates good cause will be considered on a facts
and circumstances basis with due regard for protecting the integrity of the Commission’s
processes.
H. Respondent Joseph Lee is denied the privilege of appearing or practicing
before the Commission as an accountant.
I. After three years from the date of this Order, Joseph Lee may request that the
Commission consider his reinstatement by submitting an application (attention: Office of the
Chief Accountant) to resume appearing or practicing before the Commission as:
1. a preparer or reviewer, or a person responsible for the preparation or review,
of any public company’s financial statements that are 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 Securities Exchange Act of 1934). Such
24
an application must satisfy the Commission that Joseph Lee’s work in his
practice before the Commission as an accountant will be reviewed either by
the independent audit committee of the public company for which he works
or in some other acceptable manner, as long as he practices before the
Commission in this capacity; and/or
2. a preparer or reviewer, or a person responsible for the preparation or review,
of any public company’s financial statements that are filed with the
Commission as a member of an audit committee, as that term is defined in
Section 3(a)(58) of the Securities Exchange Act of 1934. Such an
application will be considered on a facts and circumstances basis with
respect to such membership, and the applicant’s burden of demonstrating
good cause for reinstatement will be particularly high given the role of the
audit committee in financial and accounting matters; and/or
3. an independent accountant.
Such an application must satisfy the Commission that:
(a) Joseph Lee, or the public accounting firm with which he is
associated, is registered with the Board in accordance with the
Sarbanes-Oxley Act of 2002, and such registration continues to be
effective;
(b) Joseph Lee, or the registered public accounting firm with which he
is associated, has been inspected by the Board and that inspection
did not identify any criticisms of or potential defects in the
respondent’s or the firm’s quality control system that would
indicate that Joseph Lee will not receive appropriate supervision;
(c) Joseph Lee has resolved all disciplinary issues with the Board, and
has complied with all terms and conditions of any sanctions
imposed by the Board (other than reinstatement by the
Commission); and
(d) Joseph Lee acknowledges his responsibility, as long as he appears
or practices before the Commission as an independent accountant,
to comply with all requirements of the Commission and the Board,
including, but not limited to, all requirements relating to
registration, inspections, engagement quality reviews, and quality
control standards.
J. The Commission will consider an application by Joseph Lee to resume appearing
or practicing before the Commission provided that his state CPA license is current and he has
resolved all other disciplinary issues with the applicable state boards of accountancy. However,
25
if state licensure is dependent on reinstatement by the Commission, the Commission will
consider an application on its other merits. The Commission’s review may include consideration
of, in addition to the matters referenced above, any other matters relating to Joseph Lee’s
character, integrity, professional conduct, or qualifications to appear or practice before the
Commission as an accountant. Whether an application demonstrates good cause will be
considered on a facts and circumstances basis with due regard for protecting the integrity of the
Commission’s processes.
K. Respondent Juchi Lee is denied the privilege of appearing or practicing before
the Commission as an accountant.
L. After three years from the date of this Order, Juchi Lee may request that the
Commission consider her reinstatement by submitting an application (attention: Office of the
Chief Accountant) to resume appearing or practicing before the Commission as:
1. a preparer or reviewer, or a person responsible for the preparation or review,
of any public company’s financial statements that are 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 Securities Exchange Act of 1934). Such
an application must satisfy the Commission that Juchi Lee’s work in her
practice before the Commission as an accountant will be reviewed either by
the independent audit committee of the public company for which she works
or in some other acceptable manner, as long as she practices before the
Commission in this capacity; and/or
2. a preparer or reviewer, or a person responsible for the preparation or review,
of any public company’s financial statements that are filed with the
Commission as a member of an audit committee, as that term is defined in
Section 3(a)(58) of the Securities Exchange Act of 1934. Such an
application will be considered on a facts and circumstances basis with
respect to such membership, and the applicant’s burden of demonstrating
good cause for reinstatement will be particularly high given the role of the
audit committee in financial and accounting matters; and/or
3. an independent accountant.
Such an application must satisfy the Commission that:
(a) Juchi Lee, or the public accounting firm with which she is
associated, is registered with the Board in accordance with the
Sarbanes-Oxley Act of 2002, and such registration continues to be
effective;
26
(b) Juchi Lee, or the registered public accounting firm with which she
is associated, has been inspected by the Board and that inspection
did not identify any criticisms of or potential defects in the
respondent’s or the firm’s quality control system that would
indicate that Juchi Lee will not receive appropriate supervision;
(c) Juchi Lee has resolved all disciplinary issues with the Board, and
has complied with all terms and conditions of any sanctions
imposed by the Board (other than reinstatement by the
Commission); and
(d) Juchi Lee acknowledges her responsibility, as long as she appears
or practices before the Commission as an independent accountant,
to comply with all requirements of the Commission and the Board,
including, but not limited to, all requirements relating to
registration, inspections, engagement quality reviews, and quality
control standards.
M. The Commission will consider an application by Juchi Lee to resume appearing or
practicing before the Commission provided that her state CPA license is current and she has
resolved all other disciplinary issues with the applicable state boards of accountancy. However,
if state licensure is dependent on reinstatement by the Commission, the Commission will
consider an application on its other merits. The Commission’s review may include consideration
of, in addition to the matters referenced above, any other matters relating to Juchi Lee’s
character, integrity, professional conduct, or qualifications to appear or practice before the
Commission as an accountant. Whether an application demonstrates good cause will be
considered on a facts and circumstances basis with due regard for protecting the integrity of the
Commission’s processes.
N. Respondent PLS shall, within 360 days of the entry of this Order, pay disgorgement
of $36,000.00, prejudgment interest of $1,028.24, and civil money penalties of $36,000.00 to the
Securities and Exchange Commission. The Commission may distribute civil money penalties
collected in this proceeding if, in its discretion, the Commission orders the establishment of a Fair
Fund pursuant to 15 U.S.C. § 7246, Section 308(a) of the Sarbanes-Oxley Act of 2002. The
Commission will hold funds paid pursuant to this paragraph in an account at the United States
Treasury pending a decision whether the Commission, in its discretion, will seek to distribute funds
or, subject to Exchange Act Section 21F(g)(3), transfer them to the general fund of the United
States Treasury. If timely payment of disgorgement and prejudgment interest is not made,
additional interest shall accrue pursuant to SEC Rule of Practice 600. If timely payment of civil
money penalties is not made, additional interest shall accrue pursuant to 31 U.S.C. §3717.
Payment shall be made in the following installments:
1. $14,605.64 within 30 days of the entry of this Order;
2. $14,605.65 within 90 days of the entry of this Order;
3. $14,605.65 within 180 days of the entry of this Order;
27
4. $14,605.65 within 270 days of the entry of this Order; and
5. $14,605.65 within 360 days of the entry of this Order.
Payments shall be applied first to post order interest, which accrues pursuant to SEC Rule of
Practice 600 and/or pursuant to 31 U.S.C. 3717. Prior to making the final payment set forth herein,
Respondent shall contact the staff of the Commission for the amount due. If Respondent PLS fails
to make any payment by the date agreed and/or in the amount agreed according to the schedule set
forth above, all outstanding payments under this Order, including post-order interest, minus any
payments made, shall become due and payable immediately at the discretion of the staff of the
Commission without further application to the Commission.
O. Respondent Park shall, within 360 days of the entry of this Order, pay a civil money
penalty in the amount of $38,556.00 to the Securities and Exchange Commission. The
Commission may distribute civil money penalties collected in this proceeding if, in its discretion,
the Commission orders the establishment of a Fair Fund pursuant to 15 U.S.C. § 7246, Section
308(a) of the Sarbanes-Oxley Act of 2002. The Commission will hold funds paid pursuant to this
paragraph in an account at the United States Treasury pending a decision whether the Commission,
in its discretion, will seek to distribute funds or, subject to Exchange Act Section 21F(g)(3),
transfer them to the general fund of the United States Treasury. If timely payment is not made,
additional interest shall accrue pursuant to 31 U.S.C. §3717. Payment shall be made in the
following installments:
1. $7,711.20 within 30 days of the entry of this Order;
2. $7,711.20 within 90 days of the entry of this Order;
3. $7,711.20 within 180 days of the entry of this Order;
4. $7,711.20 within 270 days of the entry of this Order; and
5. $7,711.20 within 360 days of the entry of this Order.
Payments shall be applied first to post order interest, which accrues pursuant to 31 U.S.C. 3717.
Prior to making the final payment set forth herein, Respondent shall contact the staff of the
Commission for the amount due. If Respondent fails to make any payment by the date agreed
and/or in the amount agreed according to the schedule set forth above, all outstanding payments
under this Order, including post-order interest, minus any payments made, shall become due and
payable immediately at the discretion of the staff of the Commission without further application
to the Commission.
P. Respondent Joseph Lee shall, within 360 days of the entry of this Order, pay a civil
money penalty in the amount of $19,278.00 to the Securities and Exchange Commission. The
Commission may distribute civil money penalties collected in this proceeding if, in its discretion,
the Commission orders the establishment of a Fair Fund pursuant to 15 U.S.C. § 7246, Section
308(a) of the Sarbanes-Oxley Act of 2002. The Commission will hold funds paid pursuant to this
paragraph in an account at the United States Treasury pending a decision whether the Commission,
in its discretion, will seek to distribute funds or, subject to Exchange Act Section 21F(g)(3),
transfer them to the general fund of the United States Treasury. If timely payment is not made,
28
additional interest shall accrue pursuant to 31 U.S.C. §3717. Payment shall be made in the
following installments:
1. $3,855.60 within 30 days of the entry of this Order;
2. $3,855.60 within 90 days of the entry of this Order;
3. $3,855.60 within 180 days of the entry of this Order;
4. $3,855.60 within 270 days of the entry of this Order; and
5. $3,855.60 within 360 days of the entry of this Order.
Payments shall be applied first to post order interest, which accrues pursuant to 31 U.S.C. 3717.
Prior to making the final payment set forth herein, Respondent shall contact the staff of the
Commission for the amount due. If Respondent fails to make any payment by the date agreed
and/or in the amount agreed according to the schedule set forth above, all outstanding payments
under this Order, including post-order interest, minus any payments made, shall become due and
payable immediately at the discretion of the staff of the Commission without further application
to the Commission.
Q. Respondent Juchi Lee shall, within 360 days of the entry of this Order, pay a civil
money penalty in the amount of $19,278.00 to the Securities and Exchange Commission. The
Commission may distribute civil money penalties collected in this proceeding if, in its discretion,
the Commission orders the establishment of a Fair Fund pursuant to 15 U.S.C. § 7246, Section
308(a) of the Sarbanes-Oxley Act of 2002. The Commission will hold funds paid pursuant to this
paragraph in an account at the United States Treasury pending a decision whether the Commission,
in its discretion, will seek to distribute funds or, subject to Exchange Act Section 21F(g)(3),
transfer them to the general fund of the United States Treasury. If timely payment is not made,
additional interest shall accrue pursuant to 31 U.S.C. §3717. Payment shall be made in the
following installments:
1. $3,855.60 within 30 days of the entry of this Order;
2. $3,855.60 within 90 days of the entry of this Order;
3. $3,855.60 within 180 days of the entry of this Order;
4. $3,855.60 within 270 days of the entry of this Order; and
5. $3,855.60 within 360 days of the entry of this Order.
Payments shall be applied first to post order interest, which accrues pursuant to 31 U.S.C. 3717.
Prior to making the final payment set forth herein, Respondent shall contact the staff of the
Commission for the amount due. If Respondent fails to make any payment by the date agreed
and/or in the amount agreed according to the schedule set forth above, all outstanding payments
under this Order, including post-order interest, minus any payments made, shall become due and
payable immediately at the discretion of the staff of the Commission without further application
to the Commission.
29
R. 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 PLS, Park,
Joseph Lee or Juchi Lee 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 Alka Patel,
Associate Regional Director, Division of Enforcement, Securities and Exchange Commission, 444
South Flower Street, Suite 900, Los Angeles, CA, 90071.
S. Regardless of whether the Commission in its discretion orders the creation of a
Fair Fund for the penalties ordered in this proceeding, 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,
Respondents agree that in any Related Investor Action, they shall not argue that they are entitled
to, nor shall they 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, Respondents agree that they
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
Respondents 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.
30
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
Respondents Park, Joseph Lee, and Juchi Lee, and further, any debt for disgorgement, prejudgment
interest, civil penalty or other amounts due by Respondents Park, Joseph Lee, and/or Juchi Lee
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 Respondents Park,
Joseph Lee, and/or Juchi Lee 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
UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 92361 / July 9, 2021
ACCOUNTING AND AUDITING ENFORCEMENT
Release No. 4224 / July 9, 2021
ADMINISTRATIVE PROCEEDING
File No. 3-19767
In the Matter of
PLS, CPA, A PROFESSIONAL
CORPORATION, A/K/A PLS CPAs,
CHANG G. PARK, CPA, A/K/A
CHANGGEUN PARK,
JOSEPH YONGYUN LEE, CPA,
A/K/A YONG YUN LEE, and
JUCHI LEE, CPA, A/K/A
JUCHI LEE FERNANDEZ,
JU-CHI LEE, JU CHI LEE,
SUE LEE,
Respondents.
ORDER MAKING FINDINGS AND
IMPOSING REMEDIAL SANCTIONS AND
A CEASE-AND-DESIST ORDER
PURSUANT TO SECTIONS 4C AND 21C OF
THE SECURITIES EXCHANGE ACT OF
1934 AND RULE 102(e) OF THE
COMMISSION’S RULES OF PRACTICE
I.
On April 24, 2020, the Securities and Exchange Commission (“Commission”) instituted
public administrative and cease-and-desist proceedings against PLS, CPA, A Professional
Corporation, a/k/a PLS CPAs (“PLS”), Chang G. Park, CPA, a/k/a Changgeun Park (“Park”),
Joseph Yongyun Lee, CPA, a/k/a Yong Yun Lee (“Joseph Lee”), and Juchi Lee, CPA, a/k/a
Juchi Lee Fernandez, Ju-chi Lee, Ju Chi Lee, Sue Lee (“Juchi Lee”) (collectively, “Respondents”)
pursuant to Sections 4C1 and 21C of the Securities Exchange Act of 1934 (“Exchange Act”) and
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
2
Rule 102(e)(1)(ii) and 102(e)(1)(iii) of the Commission’s Rules of Practice.2 The Commission
now deems it appropriate to enter this Order Making Findings and Imposing Remedial Sanctions
and a Cease-and-Desist Order Pursuant to Sections 4C and 21C of the Exchange Act and Rule
102(e)(1)(ii) and 102(e)(1)(iii) of the Commission’s Rules of Practice against Respondents.
II.
Respondents have submitted Offers of Settlement (the “Offers”) 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 them and
the subject matter of these proceedings, which are admitted, and except as provided herein in
Section V, Respondents consent to the entry of this Order Making Findings and Imposing
Remedial Sanctions and a Cease-and-Desist Order Pursuant to Sections 4C and 21C of the
Securities Exchange Act of 1934 and Rule 102(e) of the Commission’s Rules of Practice
(“Order”), as set forth below.
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.
Rule 102(e)(1)(iii) 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
willfully violated, or willfully aided and abetted the violation of any provision of
the Federal securities laws or the rules and regulations thereunder.
3
III.
On the basis of this Order and Respondents’ Offers, the Commission finds that:
A. SUMMARY