Deloitte Says Partner Traded Illegally
WILMINGTON, DEL. (CN) - Deloitte & Touche says a 30-year partner traded on inside information he got from audits, and lied about it for years. It sued Thomas P. Flanagan in Chancery Court.
Flanagan "for 30 years was a partner" in Deloitte & Touche or a predecessor "until his abrupt resignation less than two months ago," Deloitte claims. It says he betrayed his trust and violated company policy by trading in securities of audit clients, including some of his own accounts, since 2005.
"Compounding his wrongdoing, Flanagan repeatedly lied to Deloitte about his clandestine trading activities in annual written certifications, going to far as to conceal the existence of a number of his brokerage accounts to avoid detection of his improper conduct," Deloitte says. It says that both Deloitte and its clients have had to pay legal costs to investigate Deloitte's ability to continue as independent auditor, due to Flanagan's shenanigans. It seeks monetary damages.
The complaint does not state, or estimate, how much Flanagan made from his alleged inside trades. Deloitte says that it still does not know the extent of them.
Deloitte & Touche is represented by Paul Lockwood with Skadden Arps.