Ex-Deloitte partner accused over insider trading

11 November 2008

Accounting firm Deloitte has filed a legal action accusing a former partner and vice-chairman of the company of trading on insider information and fraud.

Papers submitted to a court in Delaware allege that Thomas Flanagan, a former advisory partner to Deloitte's Chicago-based audit team, used privileged, non-public information to trade on a public company just one week before a Deloitte audit client confirmed its takeover of the firm.

A spokesman told the Chicago Tribune that the deal in question was the 2007 acquisition of Option Care Inc by pharmacy chain Walgreens.

Deloitte also accused Mr Flanagan of trading in securities of at least 12 of its audit clients, seven of whom he had worked with directly.

"[Mr Flanagan's] personal trading activities were in blatant violation of Deloitte's strict and clearly stated policies for investments by partners and other professional personnel. Further, it appears that he intentionally skirted our system for reporting and tracking investments," it added.

Federal authorities have not accused Mr Flanagan of any wrongdoing, although the Securities and Exchange Commission is believed to be investigating the claims, the Chicago Tribune added.

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