According to the financial services regulator, Thomas P Flanagan traded using insider information on nine occasions between 2005 and 2008, which allowed him to make profits of over $430,000.
While working at the firm, Mr Flanagan had access to information surrounding the advanced earnings of clients and other information from auditing contracts.
He is alleged to have used this information to make trades in securities belonging to clients while also providing his son, Patrick Flanagan, with non-public data which he also used to inform trades.
Robert Khuzami, director of the SEC's Division of Enforcement, said: âFlanagan's insider trading violated one of the most fundamental rules of public accounting.
âAll audit firms should learn from this unfortunate episode and employ vigorous controls designed to ensure compliance with the SEC's auditor independence rules.â
Further findings from the investigation revealed that the executiveâs son committed insider trading offences four times.
He is thought to have made $57,000 in illegal profits from the trades.
By Jim Ottewill