| UNITED STATES OF AMERICA | |
| before the | |
| SECURITIES AND EXCHANGE COMMISSION | |
| SECURITIES EXCHANGE ACT OF 1934 | |
| Release No. 66479 / February 27, 2012 | |
| ACCOUNTING AND AUDITING ENFORCEMENT | |
| Release No. 3367 / February 27, 2012 | |
| ADMINISTRATIVE PROCEEDING | |
| File No. 3-14780 | |
| : | |
| : | |
| : | |
| In the Matter of : ORDER INSTITUTING ADMINISTRATIVE | |
| : PROCEEDINGS PURSUANT TO RULE | |
| ROBERT CHIU, : 102(e) OF THE COMMISSION’S RULES OF | |
| ( A/K/A Chi Hung Chiu) : PRACTICE, MAKING FINDINGS, AND | |
| : IMPOSING REMEDIAL SANCTIONS | |
| Respondent. : | |
| : | |
| ____________________________________ : | |
| I. | |
| The Securities and Exchange Commission (“Commission”) deems it appropriate and in the | |
| public interest that public administrative proceedings be, and hereby are, instituted against Robert | |
| Chiu (“Chiu” or “Respondent”) pursuant to Rule 102(e)(3)(i) of the Commission’s Rules of | |
| Practice.1 | |
| 1 Rule 102(e)(3)(i) provides, in relevant part, that: | |
| The Commission, 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 | |
| Commission, from violating or aiding and abetting the violation of any provision of the Federal securities laws or of | |
| the rules and regulations thereunder. | |
| 2 | |
| II. | |
| In anticipation of the institution of these proceedings, Respondent has submitted an Offer | |
| of Settlement (the “Offer”) which the Commission has determined to accept. Solely for the | |
| purpose of these proceedings and any other proceedings brought by or on behalf of the | |
| Commission, or to which the Commission is a party, and without admitting or denying the findings | |
| herein, except as to the Commission’s jurisdiction over him and the subject matter of these | |
| proceedings, and the findings contained in Section III, Paragraph 3 below, which are admitted, | |
| Respondent consents to the entry of this Order Instituting Administrative Proceedings Pursuant to | |
| Rule 102(e) of the Commission’s Rules of Practice, Making Findings, and Imposing Remedial | |
| Sanctions (“Order”), as set forth below. | |
| III. | |
| On the basis of this Order and Respondent’s Offer, the Commission finds that: | |
| 1. Chiu, 51, was an audit partner at a major public accounting firm (the | |
| “Firm”) and served as its Relationship Partner for the Syntax-Brillian Corporation (“Syntax”) | |
| engagement for the fiscal year ended June 30, 2006, and the fiscal quarter ended September 30, | |
| 2006. Chiu also played a similar role in the Firm’s audit of South China House of Technology | |
| Consultants Co. Ltd. (“SCHOT”) in 2007. Chiu has never been licensed as a Certified Public | |
| Accountant. He is a United States citizen living in Valley Village, California. | |
| 2. Syntax was a Delaware corporation headquartered in Tempe, Arizona. | |
| Syntax developed and marketed, among other things, high-definition LCD televisions primarily in | |
| the United States and purportedly in China. At all relevant times, the Company’s common stock | |
| was registered with the Commission pursuant to Section 12(b) of the Securities Exchange Act of | |
| 1934 (“Exchange Act”). Prior to its suspension on July 22, 2008, the Company’s common stock | |
| was listed for trading on the Nasdaq under the stock symbol “BRLC.” The Company’s fiscal year | |
| ends on June 30. | |
| 3. On January 30, 2012, the Commission filed a Complaint against Chiu in the | |
| United States District Court for the District of Arizona. On February 20, 2012, the Court entered | |
| an order permanently enjoining Chiu, by consent, from aiding and abetting violations of Sections | |
| 10(b), 13(b)(2)(A), 13(b)(2)(B), and 13(b)(5) of the Exchange Act, and Exchange Act Rules 10b-5, | |
| 13b2-1, and 13b2-2. | |
| 4. The Complaint alleges that Chiu aided and abetted a fraudulent revenue | |
| recognition scheme. From at least June 2006 through April 2008, Syntax’s senior management | |
| and members of its Board of Directors engaged in a complex scheme to overstate Syntax’s | |
| revenues and earnings and artificially inflate its stock price. This resulted in Syntax’s reported | |
| financial statements being materially false and misleading from the fiscal year ended June 30, | |
| 2006, through the fiscal first quarter ended September 30, 2007. The scheme was concealed with | |
| 3 | |
| forged sales and shipping documents, as well as through the circular transfer of cash among and | |
| between Syntax, its primary manufacturer in Taiwan, Taiwan Kolin Co., Ltd., and its purported | |
| distributor in Hong Kong, SCHOT, that altogether created a façade of substantial revenues and | |
| cash flows. | |
| 5. According to the Complaint, as part of the fraudulent scheme, Syntax | |
| executives sought to recognize revenue on what were actually fictitious fiscal 2006 year-end sales | |
| between Syntax and SCHOT. Based on the facts presented to Chiu, he knew it was improper for | |
| the Company to recognize revenue on these sales. Specifically, Chiu knew that the sales failed to | |
| meet requirements under GAAP (Generally Accepted Accounting Principles) due in part to the | |
| lack of a valid sales distribution agreement between Syntax and SCHOT at the time of the | |
| purported sales. | |
| 6. The Complaint also alleges that, during the period between August and | |
| September of 2007, based on audit procedures the Firm performed in the audits of SCHOT’s | |
| financial statements for the period ended in March 2007, Chiu also failed to object to the Firm’s | |
| issuance of multiple consents to the reissuance of its audit opinion to Syntax’s Form 10-K for fiscal | |
| year 2007. | |
| 7. B y the conduct described herein, Chiu aided and abetted the antifraud, | |
| recordkeeping, internal control, and communication with auditors provisions of the federal | |
| securities laws. | |
| IV. | |
| In view of the foregoing, the Commission deems it appropriate and in the public interest to | |
| impose the sanction agreed to in Respondent’s Offer. | |
| Accordingly, it is hereby ORDERED, effective immediately, that: | |
| A. Chiu is suspended from appearing or practicing before the Commission as an | |
| accountant. | |
| B. After 5 years from the date of this order, Chiu may request that the | |
| Commission consider his reinstatement by submitting an application (attention: Office of the | |
| Chief Accountant) to resume appearing or practicing before the Commission as an accountant. | |
| By the Commission. | |
| Elizabeth M. Murphy | |
| Secretary |