In addition to the court filed complaint alleging illegal insider trading, the SEC also instituted administrative proceedings against Thomas Flanagan, finding that he violated the SEC’s auditor independence rules on 71 occasions between 2003 and 2008 by trading in the securities of nine Deloitte audit clients. Accountants are not independent if they own or control securities in the clients that they audit. The SEC’s settled administrative order finds that while Thomas Flanagan owned or controlled client securities, Deloitte issued audit reports to the clients stating that the financial statements contained in the reports had been audited by an independent auditor.

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