Unbeknownst to coworkers at AmTrust Financial Services (AFSI​), an auditor was secretly taping conversations through a device disguised as a Starbucks gift card, according to a Wall Street Journal report. AmTrust Financial shares plummeted more than 19 percent, forging fresh 52-week lows in Tuesday’s session on the report.

The auditor, from accounting firm BDO USA LLP, was cooperating as a whistleblower for the Securities and Exchange Commission. The person captured casual conversations for the Federal Bureau of Investigation in 2014 as part of an ongoing investigation into AmTrust’s accounting practices after the insurer drew skepticism over the pace of its growth, which attracted short sellers. (See also: The SEC Whistleblower Program's Quiet Success.)

The auditor making the clandestine recordings had worked on audits for AmTrust for three years but is no longer working with BDO. The group with which the auditor now works – which includes an accountant who had warned about the Bernie Madoff Ponzi scheme – is hoping to collect a profit from the SEC’s whistleblower program. (See also: Deere to Pay $275,000 to Settle Whistleblower Suit.)

An AmTrust spokeswoman declined to comment to the Journal on whether AmTrust was aware of an SEC investigation. But she called the allegations that the firm has untoward accounting practices “fantasies concocted and intentionally publicized by parties who clearly have a self-serving agenda and appear to be trying to profit from misinformation about AmTrust.”

AmTrust recently revised its financial statements for the past three years, reducing net income by more than 9 percent, after KPMG LLP replaced BDO as its outside auditor. The whistleblower said BDO was rushed during its audits, and AmTrust regularly relied on adjustments that were not supported by documents to complete financial schedules.

The New York Department of Financial Services is also investigating AmTrust’s practices, The Wall Street Journal said, citing a “person familiar with the matter.”

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