The Case of the Almost Stolen Clients
RULES THAT APPLY:
Rule 502 - Advertising and Other forms of Solicitation. A member in public practice shall not seek to obtain clients by advertising or other forms of solicitation in a manner that is false, misleading, or deceptive. Solicitation by the use of coercion, over-reaching, or harassing conduct is prohibited.
Respondent: Mr. Knotmee
Complaint Submitted by: The Firm
In a letter to the ICPAS, The Firm indicated that Mr. Knotmee, a former employee, improperly solicited clients of The Firm after his departure. In particular, The Firm stated that:
At time of Mr. Knotmee’s termination, he was asked to return all copies of any client lists and information. However, he failed to comply with this request.
Prior to Mr. Knotmee’s termination, his personnel file disappeared, which contained the non-compete agreement.
In a solicitation (marketing) letter, Mr. Knotmee claims to employ current employees of The Firm. However, these employees have stated that they indeed do not work for Mr. Knotmee.
The Firm disputed some of the claims that Mr. Knotmee made in his marketing letter. Among the disputed claims:
Mr. Knotmee stated he was a consulting manager at The Firm. - The Firm argued that he was classified as staff.
Mr. Knotmee stated that he parted company with The Firm on April 15, 19xx. - The Firm stated that Mr. Knotmee was terminated on March 31 on the same year and that the reasons Mr. Knotmee gave for his dismissal are not representative of reality.
Mr. Knotmee stated that many of The Firm’s associates worked in conjunction w/Mr. Knotmee’s company. - The Firm stated that there are NO employees at The Firm who work for Mr. Knotmee’s company.
In Mr. Knotmee’s resume, he stated that he is a member of the AICPA. - The Firm knows this to be false.
The ICPAS contacted Mr. Knotmee to inform him of the complaint made by The Firm, and to request a meeting. In the meeting between Mr. Knotmee and the ICPAS, Mr. Knotmee conceded that he should not have claimed to be member of AICPA since he is not. He stated that it was an oversight and he did not attempt to deceive. He also was under the impression that it is the responsibility of The Firm to prove advertising material is false. The Ethics Committee informed him that it is the obligation of the member to verify his own advertising materials. Mr. Knotmee supported his fee claims by presenting invoices by The Firm and by other accounting firms. However, since that type of information is confidential, it could not be disclosed, otherwise it would violate another ethics rule (Rule 301).
Mr. Knotmee said that although he has no employees now except himself, the persons he listed on his solicitation letter would work with him on his request. Mr. Knotmee did not receive any clients from the marketing letter. He promised to refrain from soliciting The Firm's clients in the future.
The ICPAS found prima facie evidence that Mr. Knotmee had violated Rule 502.
The ICPAS and the AICPA instructed Mr. Knotmee to immediately comply with the ICPAS Code of Professional Conduct, to take and pass the AICPA course, Professional Ethics for CPAs, and to submit evidence that he has passed course.
While we all like to make our resumes as informative as possible, make sure the information is correct, and that you don’t pretend to be who you are not. Information that is false, misleading, or deceptive can get you into big trouble!
Special thanks to Dr. Howard A. Kanter of the DePaul University School of Accountancy
and the ICPAS Ethics Committee for developing and maintaining the Ethics Case Studies.