Former Deloitte vice chairman and partner for
clients and markets, Thomas Flanagan, has pleaded guilty to one
count of securities fraud, which carries a maximum sentence of 20
years in prison and a $5m fine.

Flanagan admitted to the criminal charge
brought against him by saying he conducted inside trading based on
non-public information from the firm’s clients, taking advantage of
his capacity as advisory partner.

The former Deloitte partner acknowledged
illegal profits of $420,000. He also shared the inside information
with his son who perceived $58,000 trading based on this

After a plea-bargaining with the US
prosecutor, Flanagan could receive a sentence of 37 months in
prison, the lowest range of the government’s sentencing

The US Securities and Exchange Commission
(SEC) brought civil action against Flanagan in August 2010. The SEC
alleged that Flanagan engaged in inside trading on nine occasions
between 2005 and 2008.

Previously the SEC had begun administrative
proceedings concluding that Flanagan violated SEC’s auditor
independence rules on 71 occasions between 2003 and 2008.

Flanagan has neither admitted nor denied SEC’s
allegations in the civil case but agreed to pay disgorgement
totalling $1,051,042 and to give up the privilege of practising
before the SEC as an accountant.

According to the SEC, Flanagan is scheduled to
be sentenced on 25 October.