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Criminal liability under the Securities Acts

The Continental Vending case (also known as United States v. Simon) has set the precedent of severe charges for accountants. In this case, the U.S. court of appeals convicted three CPAs of gross negligence. Although the CPAs had proof to establish that they complied with U.S. generally accepted accounting principles and the U.S. generally accepted accounting standards, Mano states that the district court judge instructed the jury that mere compliance with professional accounting standards was not a complete defense. This led to the conviction of the three CPAs, who were later pardoned by President Richard Nixon.