Accounting firm Deloitte & Touche LLP has sued its former vice chairman for trading in securities of the firm’s audit clients. In a lawsuit filed Oct. 29 in Delaware Chancery Court, Deloitte said Thomas Flanagan “repeatedly lied to Deloitte about his clandestine trading activities in annual written certifications, going so far as to conceal the existence of a number of his brokerage accounts to avoid detection.” Complaint of Deloitte LLP v. Thomas P. Flanagan. (.pdf)
The complaint states:
- In 2007 Flanagan purchased stock a client’s acquisition target one week before the client publicly announce the acquisition.
- Between January 2005 and June 2008, Flanagan engaged in put and call trades for at least 12 audit clients.
These actions were violations of Deloitte’s insider trading policies. See the story in Crain’s Chicago Business: Deloitte partner accused of improper trading in client stocks.