Settlement sought as Irish arm of Grant Thornton to meet mediator in fraud case

Company denies colluding during audits to help US investment firm engage in fraud

Insurance representatives for Grant Thornton’s Irish arm will meet a mediator this month to see if a settlement can be thrashed out in a case linked to an action filed earlier this year. It has been accused of colluding during audits of a Florida investment firm to help it engage in fraudulent activity that resulted in a $400m (€368m) black hole in the company’s balance sheet.

Grant Thornton’s office in the Cayman Islands has just agreed to a settlement in principle in the related 2020 legal action, but it is contingent on Grant Thornton Ireland also reaching a deal.

Jonathan Perlman, the receiver of the Florida-based investment firm, TCA Fund Management Group, and related entities, sued Grant Thornton Ireland and Grant Thornton Cayman Islands in January, claiming that the pair took part in a cover-up by colluding during audits to help the investment firm engage in fraudulent activity.

A partner at Grant Thornton Ireland, John Glennon, has also been accused by Mr Perlman in the same legal action of having helped the US firm’s master fund to tailor the wording of potentially negative audit findings to minimise investor concerns.

Grant Thornton Ireland rejected the allegations in January, when the lawsuit was launched.

“Grant Thornton Ireland categorically denies all claims of wrongdoing alleged regarding its work on the TCA Global audits,” said a spokesperson.

In 2020, a case was launched in Miami by investors in entities connected to TCA Fund Management against TCA and its former executives.

Grant Thornton Ireland and Grant Thornton Cayman Islands are also listed as defendants in that case.

Last month, Mr Perlman asked a Florida court to merge the action he filed this year against Grant Thornton Ireland and the accountancy firm’s office in the Cayman Islands into that 2020 action.

That motion is now stayed pending the outcome of this month’s mediation in the 2020 case.

The two cases are said, by Mr Perlman, to entail “substantially similar issues”.

“Plaintiff states that the parties participated in a joint mediation on March 25, 2024 in the related case, which resulted in a settlement in principle with defendant Grant Thornton Cayman Islands contingent upon a settlement being reached with defendant Grant Thornton Ireland,” notes a new court filing in the complaint filed by Mr Perlman, in January.

The mediator in the 2020 action has told the court that Grant Thornton Ireland has four layers of insurance, each syndicated with various carriers.

Senior claims specialist Stuart Worman, of Axis Capital, appeared via Zoom at the March mediation session, on behalf of all four layers of the Irish arm’s coverage.

But the mediator, Michael Hanzman, told the court that while Mr Worman has some relationship with the layer one and layer three insurers for Grant Thornton Ireland, he has no relationship, or power to act for, the layer two and layer four carriers.

Mr Hanzman added that the March mediation session was hampered by the absence of a representative of each insurance carrier on behalf of Grant Thornton Ireland.

The mediation in that related case is due to recommence at the end of this month.

“The additional participants at the continued mediation will include certain representatives from Grant Thornton Ireland’s insurers and one class representative plaintiff from the related action,” the court filings added.

‘March mediation was hampered by the absence of a representative of each insurance carrier on behalf of Grant Thornton’