High angle view of mallet eyeglasses legal book in courtroom

The U.S. Securities and Exchange Commission (SEC) has charged six accountants on Monday in connection with an alleged scheme to misappropriate information about planned regulatory reviews of auditing firm KPMG LLP in an effort to game the oversight process.

The SEC six accountants charged include both former senior officials at KPMG and former staffers at the U.S. audit regulator, the Public Company Accounting Oversight Board (PCAOB). The SEC alleges that the PCAOB officials gave confidential information about planned inspections of KPMG’s audits to the firm’s auditors, “enabling the former KPMG partners to analyze and revise audit workpapers in an effort to avoid negative findings by the PCAOB.”

The alleged misconduct began in 2015 and persisted until February 2017, according to the SEC, which says that after the conduct was discovered, the six respondents were terminated, resigned or placed on leave before leaving their firms. The allegations have not been proven.

“As alleged, these accountants engaged in shocking misconduct — literally stealing the exam — in an effort to interfere with the PCAOB’s ability to detect audit deficiencies at KPMG,” says Steven Peikin, co-director of the SEC’s enforcement division, in a statement. “The PCAOB inspections program is meant to assess whether firms are cutting corners, compromising their independence, or otherwise falling short in their responsibilities. The SEC cannot tolerate any scheme to subvert that important process.”

In a parallel action, the U.S. Attorney’s Office for the Southern District of New York also announced criminal charges against the six accountants. The charges have not been proven and the defendants are presumed to be innocent.

One of the accused, a former PCAOB official, has agreed to settle to the SEC’s allegations, “requiring that he cease-and-desist from violating PCAOB ethics rules and barring him from appearing or practicing before the commission as an accountant.”

“Based on discussions with the SEC staff,” says SEC chairman, Jay Clayton, in a statement. “I do not believe that today’s actions against these six individuals will adversely affect the ability of SEC registrants to continue to use audit reports issued by KPMG in filings with the commission or for investors to rely upon those required reports.

“I do not expect that these actions will adversely affect the orderly flow of financial information to investors and the U.S. capital markets, including the filing of audited financial statements with the commission,” he adds. “I have asked the SEC staff to monitor this matter closely and to stand ready to work with issuers to ensure that collateral effects, if any, to issuers and, in particular, their shareholders are minimized.”