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A Los Angeles federal court judge has jailed former KPMG partner Scott London for 14 months for his role in an insider trading scheme.
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Former KPMG partner jailed for insider trading
28 April 2014
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Mr London last year pleaded guilty to a federal charge of securities fraud through insider trading, admitting to taking cash bribes and luxury items in exchange for providing confidential information he obtained as an employee of the international accounting firm.
Mr London admitted to passing on details to his friend and jewellery store owner Bryan Shaw about five KPMG audit clients. This information then enabled Mr Shaw to make more than US$1.2 million in illicit profits by trading ahead of earnings or merger announcements.
As a result, KPMG has had to resign as the independent auditor of several high profile clients, including Herbalife and Skechers.
KPMG released a statement after the sentencing saying, "It was appropriate that Scott London was held accountable today for the consequences of his illegal and unethical actions."
According to court documents, Mr London began providing Mr Shaw with material, non-public information concerning KPMG clients in 2010. Mr Shaw’s family-run jewellery business had begun faltering in 2009 as a result of the economic downturn and Mr London has admitted that he was trying to help his friend due to his economic situation.
Mr London had worked at KPMG for nearly 30 years and was a senior partner in charge of the firm's Pacific Southwest audit practice, supervising more than 50 partners and 500 employees.
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Mr London was dismissed by the firm on 5 April 2013, immediately after admitting his involvement in the scheme.
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