Professor Donald Clarke of the Chinese Law Prof Blog just did a strictly factual post on the SEC v. Deloitte case. In that post, Professor Clarke notes how the US Securities and Exchange Commission (SEC) is seeking to obtain the workpapers of the auditors of Chinese companies publicly listed on US stock exchanges and of how last month the SEC started proceedings against the Chinese affliates of “five big accounting firms.” For a good background on all this, check out the New York Times here.
Professor Clarke then discusses how in related proceedings, the SEC has “subpoenaed documents from Deloitte Touche Tohmatsu CPA, Ltd., the Chinese auditors of Longtop Financial Technologies, a Chinese company whose financial statements were apparently less than totally accurate.”
Deloitte is fighting that subpoena by asserting that it is prohibited by Chinese law from turning over the documents sought and that if it does so, it will face punishment in China. Professor Clarke then provides the following “links to relevant court filings that look at the Chinese law issues here”:
- Deloitte’s brief in opposition to the subpoena
- Tang declaration — Expert for Deloitte
- Feinerman declaration — Expert for Deloitte
- SEC’s brief in reply to Deloitte’s brief
- Clarke declaration — Expert for the SEC
- Regulation 29 Professor Clarke describes this as “a key document relevant to the Chinese law issues and discussed in the filings.”
In a listserv email regarding his blog post, Professor Clarke notes that because he is an expert witness in the case, he “won’t be commenting further on the issues my declaration deals with – it speaks for itself – and the same may be true for Jim [Feinerman, one of the other experts], so please don’t think me (or him) rude for not responding to any comments here.
For similar reasons, I too am not able to comment, beyond to say that the issues in this case could prove hugely important and I recommend that you read the information Professor Clarke has provided.