Pollard, who is also an attorney, and Hanson did not admit or deny the charges brought against them. Hanson can apply for reinstatement after five years. Pollard was not given the option.

The third auditor, John Kinross-Kennedy, is litigating his case before an SEC administrative law judge. Kinross-Kennedy has already stated his intention to retire from public practice, according to a November filing by Digital Development partners in reporting his resignation as its independent auditor.

Pollard and his firm had been accused of unprofessional conduct in auditing financial statements of three companies that are empty shells or in the developmental stages. The SEC said the audits were seriously deficient, failing to include evidence of procedures performed or conclusions reached, and they failed to retain required documentation, perform the required engagement quality reviews, and consider fraud risks and obtain written management representations. The SEC said Pollard also failed to have procedures in place to detect, investigate, and report illegal acts

Both Hanson and Kinross-Kennedy live in the Irvine, Calif., area. In the case of the latter, the SEC says he was been the outside accountant for as many as 23 public companies since 2009. The agency alleged significant deficiencies in six of Kinross-Kennedy's audit engagements, and that he failed to obtain engagement quality reviews for more than 30 other audit engagements.

Hanson conduct engagement quality reviews for five of Kinross-Kennedy's audits. However, the SEC said he was not competent to serve in that role as he did not have recent experience and failed to exercise due professional care. Kinross-Kennedy was alleged to have used audit templates and failed to adapt to changes in auditing standards.

Kinross-Kennedy's firm was also flagged in a late 2010 inspection report by the Public Company Accounting Oversight Board. The report was issued early in 2012 and identified what the inspection team called significant deficiencies in the firm's work. These included the failure to follow up two areas in which the financial statements departed from GAAP, along with failure to perform sufficient audit procedures to test revenues; accounts receivable and the allowance for doubtful accounts and notes receivable.

Kinross-Kennedy's response to many of these points stretched to several hundred words. For example, he replied that "It is inconceivable the accounts receivable were not tested ...." And as to the departures from GAAP that the inspection team said might have resulted in potentially material misstatement, the accountant that an adjustment "actually had no impact on the company's financial condition or the results of its operation." In other areas, he conceded documentation could have been better.