James T. Adams, a former chief risk officer at Deloitte LLP, has settled charges issued Tuesday by the Securities and Exchange Commission that he “repeatedly accepted tens of thousands of dollars in casino markers while he was the advisory partner on subsidiary Deloitte & Touche’s audit of a casino gaming corporation,” according to the SEC.
By allegedly accepting the markers, which casino customers use to get gaming chips drawn against their credit lines at the casinos, the ex-CRO violated the auditor independence rules “that ensure audit firms maintain their objectivity and impartiality with respect to their clients,” the commission contends.
Without admitting or denying the charges, Adams agreed not to serve as an accountant and not violate securities laws for at least two years. Adams’s lawyer, Scott Schreiber, of Arnold & Porter LLP, had no comment.
Adams, who from 2005 to May 2010 was CRO of D&T, a Deloitte audit subsidiary, also served as a a D&T advisory partner (a senior partner on the gaming company’s audit) for a year starting in January 2009. The gaming company was not named in the SEC complaint. During that year, he asked for and got gambling markers from a casino operated by the company.Adams, who had been with Deloitte since 1975, opened a credit line with the casino in 2004. In 2009, he drew varying dollar amounts of markers worth as much as $110,000 for periods as long as 43 days. In January 2010, D&T removed Adams from working on the gaming company audit for reasons unrelated to his use of casino markers.
Adams, who later defaulted on the $110,000 in markers that he drew on December 16, 2009, hid the fact that he was drawing markers from the company “and in fact lied to a D&T partner when he was asked generally if he had casino markers from attest clients of the firm,” the SEC charged. He retired from D&T in May 2010.