ADMINISTRATIVE PROCEEDING
File No. 3-21539

August 1, 2023 - The Securities and Exchange Commission today announced settled administrative and cease-and-desist proceedings against certified public accountant John R. Browne, a resident of Lakewood, Colorado, for failing to comply with Public Company Accounting Oversight Board (PCAOB) standards while conducting an audit and three quarterly reviews of MusclePharm Corporation (MusclePharm).

According to the SEC's order, Browne failed to comply with PCAOB standards in connection with the audit of MusclePharm's financial statements for its fiscal year ended December 31, 2017, and the quarterly reviews for the first three quarters of 2018. Specifically, the SEC's order finds that MusclePharm prematurely recognized revenue on certain sales where delivery had not yet occurred and improperly classified certain marketing-related customer credits as operating expenses rather than reductions to revenue, and that Browne, the engagement partner on the audit and reviews, failed to appropriately audit these areas. The SEC's order finds that Browne's conduct departed from multiple PCAOB standards, including failing to: (1) exercise due professional care; (2) properly supervise the audit engagement; (3) gain an understanding of key aspects of MusclePharm's business; (4) plan the audit based on assessed risks; (5) obtain sufficient appropriate audit evidence; (6) properly evaluate audit results; (7) adequately document the audit work; and (8) adhere to the professional standards for the review of interim financial information. The SEC's order further finds that Browne approved and signed an audit report stating that MusclePharm's fiscal year 2017 audit was conducted in accordance with PCAOB standards, when it was not.

The SEC's order finds that Browne engaged in improper professional conduct within the meaning of Section 4C(a)(2) of the Securities Exchange Act of 1934 and Rule 102(e) of the SEC's Rules of Practice, and that Browne caused a violation of Rule 2-02(b)(1) of Regulation S-X. Without admitting or denying the SEC's findings, Browne consented to cease and desist from committing or causing any violations and any future violations of Rule 2-02(b) of Regulation S-X and to pay a civil penalty of $11,162. Browne further agreed to be suspended from appearing and practicing before the SEC as an accountant, but can apply for reinstatement after eighteen months.

The SEC's investigation was conducted by J. Lee Robinson of the Denver Regional Office and Trevor Schumacher of the Chicago Regional Office, and supervised by Ian S. Karpel, Nicholas P. Heinke, and Jason J. Burt of the Denver Regional Office.