FORMER KPMG AUDIT partner Scott London has had criminal charges for insider-trading brought against him in a US court.
London is charged with leaking information relating to five public companies to a friend in exchange for cash and gifts, the Wall Street Journal reports.
Wading into the issue is KPMG chairman and CEO John Veihmeyer who said the firm is planning legal action against the former partner. However, London’s lawyer Harland Braun declined to comment on that.
Veihmeyer told WSJ he was “appalled” to learn the details this week, adding “we [KPMG] unequivocally condemn” London’s actions and “deeply regret the impact” on clients and firm employees.
The US authorities said London provided his friend, jewellery dealer Bryan Shaw, with advance notice of earnings or merger plans on public companies including shoe-maker Sketchers and nutrition group Herbalife.
This year Shaw allowed FBI agents to record calls with London by wearing a recording device. London is said to have received cash and gifts such as a Rolex watch in exchange for the information. However, London told the WSJ that he received a discount on the watch and dinners and “on a couple of occasions” cash parcels of $1,000 (£650) to $2,000.
Both Shaw and London have admitted wrong-doing with London bailed for $150,000. London could face up to five years in prison and up to $250,000 in fines. Both London and Shaw were charged in a related civil suit by the Securities and Exchange Commission where both admitted wrongdoing.
London, who had been with the firm for 30 years and headed up the audit division in the Los Angeles office, confessed to leaking information but made no admission to receiving funds in return in a statement sent to the Wall Street Journal.
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