The Securities and Exchange Commission has censured a former Deloitte partner and chief risk officer for taking prohibited loans from an unnamed “casino gaming issuer” who was a Deloitte audit client.

The SEC says James Adams, who retired from Deloitte in 2010 after more than 35 years with the firm, was the chief risk officer for Deloitte LLP and a partner with Deloitte & Touche LLP. He served as the advisory partner on Deloitte & Touche's audit engagement with the unnamed casino company in 2009 and developed a habit of visiting one of the company's casinos to obtain casino markers, which are utilized by the casino to draw against a customer's line of credit at the casino.

Adams opened a line of credit at the casino in 2004 and increased it to $110,000 in late 2009, then defaulted on it after D&T removed him from the audit engagement for reasons having nothing to do with the markers, the SEC said. “Adams concealed from D&T the fact that he had drawn casino markers from the casino gaming issuer 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 wrote in its enforcement release. “Accordingly, at the time that Adams retired, D&T was not aware of his casino markers from casino gaming issuer.”

The SEC says Adams violated auditor independence rules by drawing the line of credit and concealing it from the firm. The SEC says he is no longer permitted to practice as an accountant before the SEC. His CPA licenses from both Georgia and California are no longer active, the SEC said.

Deloitte said the firm cooperated fully with the SEC's investigation. "This former partner's conduct plainly violated Deloitte's policies, and he lied to Deloitte to conceal his actions," the firm said in a statement. "Mr. Adams is no longer part of our organization, and we strongly condemn his conduct.”

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