Cucinotta v. Deloitte & Touche, LLP

Deloitte and Touche (Deloitte), a public accounting firm, performed a financial audit for Global Cash Access Holdings (GCA). While performing a financial audit for another client Larry Krause, a CPA employed by Deloitte, obtained an FBI intelligence bulletin containing information about alleged illegal acts committed by GCA and members of its board of directors (Appellants). Deloitte disclosed the allegations to GCA's audit committee. A subsequent investigation revealed no evidence of misconduct on the part of GCA or Appellants. The investigation, however, resulted in a significant drop in GCA's stock price. Appellants filed a complaint for defamation and tortious interference against Deloitte and Krause (collectively, Deloitte). The district court granted Deloitte's motion for summary judgment, concluding that Deloitte's communications to the audit committee were protected by a conditional privilege. The Supreme Court affirmed on different grounds, holding (1) one who is required by law to publish defamatory matter is absolutely privileged to publish it when the communication is made pursuant to a lawful process and to a qualified person; and (2) Deloitte's statement to GCA's audit committee was therefore absolutely privileged as a matter of law because Deloitte communicated information about alleged illegal acts in accordance with federal securities law. View "Cucinotta v. Deloitte & Touche, LLP" on Justia Law