A Canadian accountant has been banned from appearing before the Securities and Exchange Commission for two years.

The SEC says that it has obtained a final judgment against Glenn Ohlhauser, a Canadian Chartered Accountant and former engagement partner on audits of the financial statements of Solucorp Industries Ltd., a Yukon Territory corporation headquartered in West Nyack, N.Y. The U.S. District Court for the Southern District of New York entered the final judgment against Ohlhauser.

The judgment permanently enjoins Ohlhauser from violating securities rules by, among other things, failing to take the steps required by that section on detecting or otherwise becoming aware of information, during the course of auditing a public company, that an illegal act has or may have occurred. Without admitting or denying the commission’s allegations against him, Ohlhauser consented to the entry of the final judgment.

In a related proceeding, the commission issued an administrative order that denies Ohlhauser the privilege of appearing before the commission as an accountant, with a right to apply for reinstatement after two years.

The commission found that Ohlhauser engaged in improper professional conduct. This is based on Ohlhauser’s failure to exercise professional skepticism and to gather competent evidential matter concerning the collectibility of license fees to afford a reasonable basis for the issuance of an unqualified audit report regarding Solucorp’s financial statements. Ohlhauser, who admitted to the commission’s finding that a final judgment was entered against him but neither admitted nor denied the second finding of improper professional conduct, consented to the entry of the administrative order against him.

The commission’s complaint in this case, which was filed in December 1999 and amended in October 2000 and September 2001, charged Ohlhauser with failing to take appropriate action on discovering possible illegal conduct during an audit of Solucorp’s December 31, 1997 financial statements.

The complaint, which also names Solucorp and certain of its current and former officers and directors as defendants, alleged that Solucorp’s management backdated a license agreement in order to cover-up Solucorp’s improper recognition during the quarter ended September 30, 1997, of $500,000 in license fees, or 40% of its revenues, and to materially overstate revenues for the six-month reporting period ended December 31, 1997.

The complaint further alleged that, on being presented during the audit with the final license agreement, Ohlhauser reasonably concluded that the agreement appeared to have been backdated for improper accounting purposes. He allegedly failed, however, to take the appropriate steps to determine the likelihood that an illegal act had occurred, and to disclose, or assure the disclosure of, any illegal acts that he uncovered.

The illegal acts at issue here included the commission of fraud by Solucorp’s president, who is alleged to have purposefully backdated the license agreement for purposes of supporting Solucorp’s improper revenue recognition.

The case is still pending against the remaining defendants, Solucorp Industries Ltd., Joseph Kemprowski, Peter Mantia, James Spartz, Robert Kuhn, Victor Herman, Arle Pierro and Bryan Fair.