Business

Grant Thornton Ireland pays €18m to settle US audit claims

Company stressed payments are without admission of liability or wrongdoing and were being made to avoid prohibitive legal costs

Grant Thornton Ireland has paid €18m in a US legal settlement to resolve a legal action over a failed US investment advisory firm. File photograph

Ronan McGreevy
Fri May 3 2024 - 20:15

Accountancy firm Grant Thornton Ireland has paid out $19.25 million (€18m) in a settlement to resolve a legal action over a failed US investment advisory firm.

The company, with the support of its insurers, will contribute the sum towards the total settlement to close out the cases and any threatened claims in full arising out of alleged fraudulent activity in a US investment advisory firm TCA Fund Management Group.

The overall agreement is subject to the execution of a written agreement and approval by the courts presiding over the relevant lawsuits.

Grant Thornton Ireland stressed that the payments are without an admission of liability or wrongdoing, and were being made to avoid “prohibitive legal defence costs in the USA and Caymen Islands”.

READ MORE

The receiver to Florida-based TCA Fund Management and credit funds it ran, including the TCA Global Credit Master Fund, named Grant Thornton Ireland audit partner John Glennon in legal documents filed with the US district court for the southern district of Florida last month.

Jonathan E Perlman, the receiver over a number of TCA entities, said in his filing that the Grant Thornton defendants – Grant Thornton Cayman Islands and Grant Thornton Ireland – “turned a blind eye” to “significant inconsistencies and proper controls” at the TCA Global Master Fund, which left independent directors in the dark. The accountancy firms served as auditors to the master fund in 2017 and 2018.

The scandal at TCA Fund Management broke in January, 2020 when NBC News reported that the firm inflated its TCA Global Credit Master Fund’s assets and returns from 2017. The report cited three employees who had filed a whistleblower complaint with US watchdog, the Securities and Exchange Commission (SEC).

“Having issued qualified audit opinions for both years, Grant Thornton maintains its position that its work on the audits complied with applicable professional standards,” it said. “As part of the resolution Grant Thornton has agreed not to pursue its demand for arbitration in the Cayman Islands.”

The agreement was reached through mediation in Florida on April 29th and resolves all claims from 2017 and 2018 audit engagements with TCA.

Ronan McGreevy

Ronan McGreevy

Ronan McGreevy is a news reporter with The Irish Times

LATEST STORIES