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Which Big 4 Firm Gets Sued the Most in Federal Court? Deloitte By a Long Shot

Deloitte office in San Jose, California

Have you ever wondered which Big 4 firm has been involved in the most federal litigation in the last four years? No? Well Law Street Media put together this beautiful post about Big 4 firms getting sued in federal court anyway and you’re going to read it.

The article is all about analytics so of course it starts with some data: The global networks of Deloitte, EY, KPMG, and PwC made a combined $189.6 billion in revenue in 2022 and employed 1.37 million people. That means of the more than 8 billion people on Earth, approximately 0.017% work for Big 4 firms (F). By service line, that $189.6 billion in revenue breaks down to:

  • Tax and Legal 21%
  • Audit and Assurance 29%
  • Consulting 50%

Off the top of my head I can think of several pundits who will have something to say about that consulting number and it will not be complimentary.

LSM then links to a 2019 Quartz article about US audit quality, you don’t need to read it but you definitely need to see this caption:

When that article was written in 2019, the PCAOB had levied just $6.5 million in fines against Big 4 accounting firms total in the 16 years since it rose up from the ashes of Enron like a bureaucratic phoenix. In 2022 alone, the PCAOB disclosed 29 disciplinary actions, up 61% from the prior year, and levied penalties of almost $10.5 million, an increase of nearly 10x from 2021 [Cornerstone Research report]. Why did we go off on that tangent? No idea, the article started it.

So here’s what Law Street Media found when they dug into Big 4 federal litigation numbers. Cases have been fairly consistent since 2019, they said, noting there is some evidence that cases peaked in 2020. Of the total cases, Deloitte came in at 105 while their competitors had about 40 each. The table below shows a case breakdown by type and number across the four firms.

Big 4 federal litigation cases by type
Case type Number of cases
850 Securities, Commodities, Exchange 29
442 Civil Rights – Jobs 28
791 Employee Retirement (ERISA) 21
3442 Civil Rights – Jobs 14
890 Statutory Actions – Other 14
190 Contract – Other 9
440 Civil Rights – Other 8
160 Stockholders Suits 6
380 Property Damage – Other 6
3850 Securities, Commodities, Exchange 5
110 Insurance 4
360 Personal Injury – Other 4
370 Fraud 4
445 Civil Rights – Americans with Disabilities Act – Employment 3
140 Negotiable Instrument 2
3440 Civil Rights – Other 2
470 Racketeer/Corrupt Organization 2
480 Consumer Credit 2
555 Habeas Corpus – Prison Condition 2
710 Labor – Fair Labor Standards Act 2

So about those cases:

Regarding the nature of these suits, the most common types have been 442 Civil Rights – Jobs and 850 Securities, Commodities, Exchange with 28 cases each, though 14 of the former have been appealed to the circuit courts, while only 5 of the latter have been so appealed. The Civil Rights Jobs cases are the fairly usual mix of plaintiffs alleging wrongful treatment based on their gender, age, or race. Half of these 442 cases targeted Deloitte.

The Securities, Commodities, Exchange cases, on the other hand, do not directly target the big four. Instead, with one notable exception, these cases allege various companies committed securities fraud and that the big four were ostensibly complicit in that they provided supposedly false or misleading audits.

The one notable exception is Securities and Exchange Commission v. MintBroker International, Ltd. et al. In this case, the Securities and Exchange Commission shut down and forced into receivership MintBroker for being an unregistered broker-dealer. As part of the litigation, Guy Gentile, the owner of MintBroker, sued EY and others for allegedly intentionally driving his company into bankruptcy.

The third most common Nature of Suit code is 791 Employee Retirement Income Security Act. These cases concern individuals suing primarily Deloitte, alleging their retirement fund is not properly handling their savings.

Let’s all congratulate Deloitte for taking home yet another #1.

Analytics Reveal Litigation Trends for Big Four Accounting Firms [Law Street]

4 thoughts on “Which Big 4 Firm Gets Sued the Most in Federal Court? Deloitte By a Long Shot

  1. I’ve heard that the largest line item on a Big 4 firm’s P&L is payroll expense. The second largest is legal fees.

  2. I would love to know under what grounds someone is suing a Big 4 under RICO and habeas corpus law.

    Did the data include pro se lawsuits?

      1. I think I found one of the racketeering ones, which was against Deloitte and a Deloitte Principal.

        Oh boy, this guy is out there. He cites the “original Thirteenth Amendment” in trying to move a state court case to federal court. The “original Thirteenth Amendment” is code for the “Titles of Nobility Amendment” which was never ratified.

        The court docket and the Notice of Removal is available for free here thanks to RECAP:

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