EY’s US general counsel quits

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The US general counsel of EY has resigned after two years in the role, as the firm nears the conclusion of an investigation into its failure to properly handle a staff cheating scandal.

Ann Cook will leave the firm on August 1, partners have been told.

Her resignation comes amid scrutiny of the actions of the general counsel’s office in 2019, when the US Securities and Exchange Commission was looking into allegations of widespread cheating on training exams, including ethics tests.

EY US paid $100mn last year to settle SEC charges related to the cheating itself as well as claims that the firm misled the regulator by failing to disclose new evidence from an internal whistleblower. The fine was twice that imposed on KPMG, which had a cheating scandal of its own.

As part of the settlement, EY was forced to appoint an independent investigator to examine the actions of “senior attorneys”, EY executives and compliance staff related to the disclosure failure.

Cook was deputy general counsel for litigation and regulatory matters in 2019, before being promoted to general counsel in 2021.

Cook did not respond to messages seeking comment, and EY declined to give a reason for her resignation.

“We wish Ann well in the next chapter,” the firm said. “She has been a valuable member of the leadership team at EY, and we thank her for her many positive contributions over the years.”

The Financial Times reported in April that the independent investigator had been given more time to complete its report, which was originally due to be finished by November. Cook tendered her resignation earlier this month, days after the submission of the report.

EY has 60 days from the completion of the report to act on its recommendations, which it cannot appeal. The report need only be shared with a special committee of three EY executives set up to handle the matter, along with US chair Julie Boland, although the SEC must be notified of how EY has responded.

The settlement proved controversial last year when an SEC commissioner, Hester Peirce, argued EY did not have an obligation to disclose the whistleblower complaint. She criticised the appointment of an independent investigator with an “implicit directive to find attorneys and compliance personnel to blame for not complying with a non-existent obligation” and “non-appealable authority to discipline or fire any EY personnel involved”.