SEC Suspends Mark McKinnies
On April 21, 2017, the Securities and Exchange Commission (“SEC”) deemed it appropriate and in the public interest that public administrative proceedings are instituted against Mark McKinnies pursuant to Rule 102(e)(3)(i) of the Commission’s Rules of Practice. Rule 102(e)(3)(i) provides that: The SEC, with due regard to the public interest and without preliminary hearing, may, by order, . . . suspend from appearing or practicing before it any . . . accountant . . . who has been by name . . . permanently enjoined by any court of competent jurisdiction, by reason of his or her misconduct in an action brought by the SEC, from violating or aiding and abetting the violation of any provision of the Federal securities laws or of the rules and regulations thereunder.
In anticipation of the institution of these proceedings, Mark McKinnies has submitted an Offer of Settlement which the SEC has determined to accept. Mark McKinnies consents to the entry of this Order Instituting Administrative Proceedings Pursuant to Rule 102(e) of the SEC’s Rules of Practice, Making Findings, and Imposing Remedial Sanctions (“Order”), as set forth below.
On the basis of this Order and Mark McKinnies’ Offer, the SEC finds that, Mark McKinnies, age 65, was a certified public accountant licensed to practice in the State of Colorado until he allowed the license to expire in 2013. He served as Chief Financial Officer and a member of the Board of Directors of Advanced Emissions Solutions, Inc. and its predecessor entity, ADA-ES, Inc. (together, “Advanced Emissions”) from 1996 until 2014. Advanced Emissions, a Delaware corporation with its principal place of business in Colorado, provides environmental solutions to customers primarily in the power generation industry. At all relevant times, Advanced Emissions’ shares were registered pursuant to Section 12(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and traded on the NASDAQ National Market. The shares were de-listed from the NASDAQ National Market as of March 30, 2015 and were re-listed on the NASDAQ Global Market as of July 7, 2016.
On April 19, 2017, a final judgment was entered against Mark McKinnies, permanently enjoining him from future violations of Sections 17(a)(2) and (3) of the Securities Act of 1933 and Rule 13b2-1 under the Exchange Act. Mark McKinnies was also ordered to pay $126,808 in disgorgement of ill-gotten gains, and $11,884 in prejudgment interest, and a $100,000 civil money penalty. The SEC’s complaint alleged that McKinnies reviewed and approved financial statements for Advanced Emissions included in filings with the Commission that violated Generally Accepted Accounting Principles (“GAAP”). The complaint alleged that Advanced Emissions, among other things: (a) failed to record a large loss contingency in connection with an adverse arbitration ruling against the company; (b) prematurely recognized revenues on long-term contracts; (c) failed to properly account for warranty accruals; (d) improperly consolidated a joint venture in Advanced Emissions’ balance sheet accounts; and (e) overstated revenues and gross profits from one of its subsidiaries. The complaint also alleged that McKinnies oversaw the inaccurate recording of transactions in the company’s books and records.
The SEC believed it appropriate and in the public interest to impose the sanction agreed to in Mark McKinnies’s Offer and ORDERED, effective immediately, Mark McKinnies to be suspended from appearing or practicing before the SEC as an accountant. After five years from the date of this Order, Mark McKinnies may request that the SEC consider his reinstatement by submitting an application to resume appearing or practicing before the SEC as a preparer or reviewer and/or an independent accountant. However, such an application must satisfy the SEC.
The SEC will consider an application by Mark McKinnies to resume appearing or practicing before the SEC provided that his state CPA license is current and he has resolved all other disciplinary issues with the applicable state boards of accountancy. However, if state licensure is dependent on reinstatement by the SEC, the SEC will consider an application on its other merits. The SEC’s review may include consideration of, in addition to the matters referenced above, any other matters relating to Mark McKinnies’ character, integrity, professional conduct, or qualifications to appear or practice before the SEC.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956 or by email at [email protected]. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
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Brenda Hamilton, Securities Attorney
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