Taylor Wessing Acts as Deloitte Faces Record £15M Fine
The U.K.'s Financial Reporting Council has accused the Big Four giant of serious misconduct in its audit of scandal plagued tech company Autonomy - which has links to Slaughter and May.
July 10, 2020 at 06:17 AM
3 minute read
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Big Four accounting giant Deloitte has turned to Taylor Wessing as it faces a record £15 million fine for its role in the audit of scandal-plagued technology firm Autonomy.
Deloitte has instructed Taylor Wessing disputes partner Julian Randall on the matter, according to one person with knowledge of the situation, who has in turn brought in Brick Court Chambers' Thomas Plewman QC.
In a virtual hearing over two days on July 9 and 10, an independent tribunal led by Lord Dyson heard that Deloitte, which audited Autonomy between 2009 and 2011, made serious errors in its audit of the tech company.
It heard that the auditor acted recklessly, and was guilty of "serious negligence" following the actions of one of its partners, and "multiple losses of objectivity in relation to important aspects of the audit".
Acting for the executive counsel of the Financial Reporting Council (FRC), which brought the case, Rebecca Sabben-Clare QC of 7KBW also said Deloitte was guilty of breaching its obligation of integrity, and that as a result its failings were "uniquely serious", which warranted what would be a record £15 million fine.
In 2019, Hewlett-Packard brought a $5 billion fraud case against Autonomy founder and former Slaughter and May-affiliate Mike Lynch, and ex-chief financial officer Sushovan Hussain, alleging the two engaged in a "deliberate fraud perpetrated by the defendants" as part of the £7.1 billion purchase of Autonomy by Hewlett-Packard in 2011.
Slaughter and May had a close relationship with Lynch, who sat on the firm's panel for its Fast Forward programme, that offered free legal advice and business support to promising tech startups.
Later that year, Slaughters' senior partner Steve Cooke was called upon as a witness in the ensuing fraud case.
The accounting sector has come under increased scrutiny following a succession of failures that many have claimed has led to a public distrust of particularly the Big Four. On Wednesday, the FRC hit Grant Thornton with a £2 million fine for auditing failings.
These and several other historic failings have led the FRC to order the Big Four to separate their auditing arms from their wider businesses by 2024, in a bid to keep them independent and financially separate from the firm's advisory and accounting divisions.
Read More
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Slaughters' ties to Mike Lynch under scrutiny after Autonomy founder's fraud charges
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