Claudius Modesti

The one and only PCAOB enforcement director to enter private practice, Claudius B. Modesti counsels and defends accounting firms, regulated entities, corporations and individuals in regulatory investigations and enforcement proceedings involving the PCAOB and the SEC, in addition to advising on other federal or state criminal investigations.Claudius was the PCAOB’s first enforcement director, leading the team that built the enforcement group from its inception.

He oversaw the development of the PCAOB’s policies and procedures for identifying matters for investigation, and he led investigations of U.S.- and foreign-based accounting firms, with many of them also requiring coordinating parallel investigations with the SEC. Claudius’ role also included overseeing the PCAOB’s litigation process.

He also played a key role in the PCAOB’s collaboration with its foreign audit regulator counterparts.Claudius managed a team of more than 60 lawyers, accountants and other professional staff with enforcement jurisdiction over 1,900 registered accounting firms. Annually, he oversaw more than 100 investigations spanning a broad range of audit matters, including:

• Accounting fraud
• Revenue recognition
• Asset impairment
• Illegal acts
• Disclosure
• Noncooperation

Prior to a 14-year tenure at the PCAOB, Claudius served with the Fraud Section of the DOJ’s Criminal Division as a trial attorney, the SEC as an enforcement attorney and the U.S. Attorney’s Office for the Eastern District of Virginia (EDVA) as a federal prosecutor in the Financial Crimes and Public Corruption Unit.After several years at the SEC’s Division of Enforcement, Claudius moved to the DOJ’s Criminal Division Fraud Section, where he investigated, indicted and prosecuted white collar crimes. At EDVA, he focused on prosecuting securities fraud by public companies.

Experience:

• Held several other positions at the U.S. Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (SEC).
• Served as the first director of the Division of Enforcement at the Public Company Accounting Oversight Board (PCAOB).
• Offers extensive enforcement experience involving the regulation and oversight of the accounting and auditing industry.

Representative Work:

• Supervised investigations and enforcement actions against the Big Four accounting firms, their affiliates and other accounting firms in jurisdictions including India, Brazil, Mexico, Turkey and Indonesia.
• Reported directly to six PCAOB Chairmen, including the Acting Chairman, from both political parties and served as a member of senior staff providing input across a broad spectrum of strategy, policy and legal areas impacting the organization.
• Established strong, collaborative working relationships with key agencies and departments, including the DOJ, the SEC, the Financial Industry Regulatory Authority, (FINRA), U.S. federal bank regulators and state accountancy boards.
• Negotiated a Memorandum of Understanding among the PCAOB, China’s Ministry of Finance and the Chinese Securities Regulatory Commission for enforcement cooperation.
• Created and developed all key elements of the PCAOB’s program, including items related to data analysis; criteria for referrals; the imposition of sanctions; processes for assessment of, and recommendations for, formal investigations; and credit for extraordinary cooperation. Also oversaw technology platforms for investigations, the selection of audit experts and annual training for all professional staff.
• Served as Chair and Vice Chair of the Enforcement Working Group of the International Forum of Independent Audit Regulators (IFIAR).
• Investigated numerous securities law violations at the SEC, including insider trading, investment advisor breaches, accounting fraud, auditor liability and Ponzi schemes.
  Led investigations of white collar crimes and other high-profile fraud matters at the DOJ, including a two-month securities and bank fraud trial in California of the former chief financial officer of a Silicon Valley media product company.
• Oversaw PCAOB investigations and litigation against auditors under the Sarbanes-Oxley Act and the Dodd-Frank Act for violations of federal securities laws, including PCAOB audit standards and rules.
• Achieved favorable settlements for the PCAOB involving a broad range of audit violations, including quality control failures, audit failures, independence violations, obstruction of PCAOB oversight and other noncooperation.

Affiliations:

• Alumni Admissions Interviewer, Georgetown University.

Education:

• J.D., Georgetown University Law Center,magna cum laude, 1991
• B.S., Georgetown University, 1986

Bar Admissions:

• District of Columbia
• New Jersey
• New York