Former SEC chairman Richard Breeden’s move to acquire three board seats at tax preparer group H&R Block is under threat after the company contacted federal investigators about a possible conflict of interest.

Breeden was appointed by the Justice Department in 2005 to monitor KPMG’s compliance with an SEC settlement over the setting up of fraudulent tax shelters for wealthy clients.

KPMG is also the auditor of H& R Block.

H&R has asked US Attorney Michael Garcia and the SEC's chief accountant to consider Breeden's relationship with KPMG.

The company is also urging shareholders to approve KPMG's reappointment as auditor and warned that electing Breeden or his associates ‘would create a grave risk that KPMG would no longer be deemed to be independent’.

Breeden has rejected the company's contentions.

Further reading:

Adelphia compensation role for ex-SEC chairman

SEC says KPMG behaviour 'unacceptable'