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Accounting firm must pay $26 million for client betrayal.

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Key Elements of Article

TLDR:

  • Accounting firm ordered to pay $26 million to former clients.
  • Director used confidential information for personal gain.

Summary of Article:

A regional Victorian accounting firm, Mulcahy and Co, along with its director James Mulcahy and a second company he is involved in, have been ordered to pay over $26 million to two former clients for using confidential information to benefit their own business opportunity. The Supreme Court found that Mr. Mulcahy formed a company with others to purchase a stake in a truck manufacturing business after discussions with clients about their intentions. The court determined the damages based on the profit and interest the clients would have received if they had proceeded with their original plans. Mr. Mulcahy’s firm is considering appealing the decision.

The judgment highlighted a breach of trust, as one of the clients mentioned that they trusted Mr. Mulcahy with confidential information, which was then used against them for personal gain. The court found the actions to be a transgression of honest behavior and ordered the payments based on the profits that were lost due to the breach of trust. Mulcahy and Co expressed disappointment with the judgment and planned to appeal, stating that the portrayal of their business in the case was not accurate.

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