Sanctions Are Imposed on ESM Auditor

Alexander Grant & Co., the accounting firm that audited collapsed ESM Government Securities, was prohibited Thursday from accepting any new business in the state for 60 days.

The ruling came at a meeting of Florida’s Board of Accountancy and left open the possibility of future reviews by the state Department of Professional Regulation.

Grant came under scrutiny after Fort Lauderdale, Fla.-based ESM collapsed in March, owing some $300 million dollars to dozens of investors. Grant had audited ESM since 1977.

The sanctions were viewed as stiff by Martha Willis, executive director of the board.

“I don’t recall where we’ve ever suspended the ability to accept new work,” he said.

Had Cooperated

Grant had cooperated with state officials to establish a set of sanctions rather than pursue additional hearings. Besides accepting no new audit clients for 60 days, Grant agreed to a series of reviews by other public accounting firms.

Attorney Alvin Stein, who represented Grant at the hearing, declined to comment when asked how the 60-day prohibition against accepting business in Florida might effect the company.

He called the ESM matter “unique; it was an aberration.”

Stein said the previous findings of the inquiry “did not constitute any act of accounting omission or dereliction” on the part of Grant.