By John L. Guerra
Editor, GRC & Fraud Software Journal
The SEC has charged a top KMPG tax partner with tipping off his stock broker with proprietary information he obtained while performing tax due diligence on upcoming mergers and acquisitions.
Thomas Avent, Jr., Southeast partner in charge of mergers and acquisitions tax at KPMG LLP, is accused of giving proprietary information to stock broker Raymond J. Pirrello, about three impending acquisitions.
Pirello then used the nonpublic information to tip a former colleague and long-time friend, Lawrence Penna, who traded in the securities of each of the three companies.
The companies included NCR Corporation, Radiant Systems, and other entities.
Much of the evidence of collusion is in the form of text messages, which the SEC provides in its complaint.
“Through his work, Avent learn[ed] secret, proprietary, carefully guarded information about upcoming corporate acquisitions,” the SEC complaint says, “including tender offers for publicly-traded companies – some of the most valuable sensitive, nonpublic information that exists within the sphere of the stock markets.