SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.

SECURITIES EXCHANGE ACT OF 1934
Rel. No. 51259 / February 25, 2005

ACCOUNTING AND AUDITING ENFORCEMENT
Rel. No. 2191 / February 25, 2005

Admin. Proc. File No. 3-11270

On February 2, 2005, the Division of Enforcement moved to dismiss administrative proceedings as to respondent Michael Mullen, CPA, formerly an audit manager with Ernst & Young, LLC ("E&Y"), "on the ground that the relief sought against Mullen has already been ordered in a separate proceeding." As described below, Mullen was involved in two separate proceedings before the Commission.

On September 25, 2003, the Commission issued an Order Instituting Public Administrative Proceedings ("OIP")¹ against Mullen and Thomas C. Trauger, formerly an E&Y audit partner, pursuant to Rule 102(e)(1)(ii) of the Commission’s Rules of Practice.² The OIP alleged that Mullen, among other things, engaged in unethical and improper professional conduct in connection with a 2000 E&Y audit of NextCard, Inc.

On January 27, 2005, the Commission issued an "Order of Forthwith Suspension Pursuant to Rule 102(e)" against Mullen in a separate proceeding.³ In that proceeding, Mullen was suspended from appearing or practicing before the Commission pursuant to Rule of Practice 102(e) because of his felony conviction.⁴

The Division argues that, because the January 27, 2005 order "provided the maximum relief sought against Mullen in the instant proceeding," this proceeding is now unnecessary. The Division requests that the Commission dismiss this proceeding against Mullen "[i]n the interest of justice, and to preserve the Commission’s resources." We conclude that, under the circumstances, it is appropriate to grant the Division’s request.⁵ Accordingly,

IT IS ORDERED that the motion of the Division of Enforcement to dismiss administrative proceedings as to respondent Michael Mullen, CPA, be, and it hereby is, granted.

By the Commission.

¹ Order Instituting Public Administrative Proceedings Pursuant to Rule 102(e) of the Commission’s Rules of Practice, Securities Exchange Act Rel. No. 48543 (Sept. 25, 2003), 81 SEC Docket 439.

² 17 C.F.R. § 201.102(e)(1)(ii). Rule of Practice 102(e) authorizes the Commission to censure or suspend (temporarily or permanently) a person who has engaged in unethical or improper professional conduct. Id.

³ In the Matter of Michael C. Mullen, CPA, Exchange Act Rel. No. 51084 (Jan. 27, 2005), __ SEC Docket ___.

⁴ See United States v. Michael C. Mullen, et al., No. CR 04-152 JSW (N.D. Cal. Oct. 20, 2004).

⁵ Although we have determined to dismiss this proceeding based on the information contained in the Division’s motion, we nonetheless note that generally, in such cases, the Division should endeavor to present a "discuss[ion of] whether obtaining a judgment in the ongoing proceeding would be important in establishing a respondent’s disciplinary history, in the event additional disciplinary actions are taken in future." In the Matter of Hunter Adams, James L. Bila, Christian Blake, and Joseph Manning, Exchange Act Rel. No. 51117 (Feb. 1, 2005), __ SEC Docket ____ (Order remanding proceedings).

http://www.sec.gov/litigation/admin/34-51259.htm