The U.S. Securities and Exchange Commission filed a lawsuit against auditor Prager Metis, who they allege violated auditor independence rules and aided and abetted their clients' violations of federal securities laws. According to the SEC, Prager Metis included indemnification provisions in more than 200 audits, reviews, and exams, which renders the firm no longer independent in its investigations of those clients.Prager Metis is among the auditors who audited FTX, and was noted by FTX's CEO-in-bankruptcy John J. Ray III for advertising itself as "the first CPA firm to officially open its headquarters inside the metaverse".
None of the clients involved with the faulty audits were disclosed in the lawsuit, and the SEC has not issued any statements connecting the charges to the FTX collapse.
