EY will pay a record $100 million fine after the SEC found 49 staff cheated on an ethics exam

• Audit giant EY reached a record-breaking settlement with the SEC over ethics exam violations.
• "Hundreds" of staff at the firm were found to have cheated on professional courses and exams.

Big Four audit giant EY has reached a record settlement with the US Securities and Exchange Commission (SEC) after the regulator found dozens of staff cheated on an ethics exam.

EY agreed to pay a $100 million penalty after the SEC found that 49 employees sent or received answer keys to a Chartered Public Accountant (CPA) ethics exam between 2017 and 2021.

In an order published Tuesday, the SEC said further that "hundreds of other audit professionals" at EY cheated on professional courses and exams, "including those addressing CPAs' ethical obligations."

The order also noted that many EY employees who did not cheat themselves were aware of the cheating, but did not report it, breaching company codes of conduct.

"This action involves breaches of trust by gatekeepers within the gatekeeper entrusted to audit many of our Nation's public companies," Gurbir Grewal, head of the SEC's enforcement division, said in a statement.

"It's simply outrageous that the very professionals responsible for catching cheating by clients cheated on ethics exams of all things," he added.

As well as the record financial settlement, the SEC said that EY has agreed to undertake "extensive remedial measures to fix the firm's ethical issues."

EY's record settlement is double the previous the penalty given to an audit firm for an ethics violation. In 2019, KPMG agreed a $50 million settlement after it was found to have used stolen data to alter already completed audits after being tipped off that it was about to be inspected.

That settlement also included charges that employees had shared answers to internal exams with each other.