(The news featured below is a selection from the news covered in Federal Securities Law Reporter, which is distributed to subscribers of Federal Securities Law Reporter.)

Accounting Firm Partner Disciplined In Connection With SPE Advice

The SEC charged Michael S. Joseph, a partner in the national office of Ernst & Young LLP, with violations of the antifraud, reporting, and recordkeeping provisions of the federal securities laws and the auditor independence standards. As alleged, Mr. Joseph helped develop and market an accounting product purported to enable a public company to transfer volatile financial assets to a special purpose entity and remove those assets from the public company's financial statements. Mr. Joseph allegedly advised a purchaser of the product that the accounting for these transactions conformed to GAAP, even though, as charged by the SEC, he should have known that this advice was inaccurate.

The Commission entered a cease and desist order, and prohibited the accountant from appearing before the SEC. According to the order, he may apply for permission to appear before the SEC in three years. Mr. Joseph consented to the entry of the order without admitting or denying the SEC's findings.

In re Michael S. Joseph, Release No. 33-8759, will be published in a forthcoming Report.