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Former KPMG partner pleads guilty to insider trading

Scott London allegedly passed confidential client information to a golfing buddy

A former senior partner at KPMG is facing up to 20 years in prison after agreeing to plead guilty to insider trading charges.

Scott London supervised hundreds of employees at the accounting firm, and also oversaw the audits of companies such as Skechers USA Inc. and Herbalife Ltd. In this capacity, he learned confidential information about KPMG clients, which he allegedly passed on to his golfing pal, jeweler Bryan Shaw.

Shaw reportedly made more than $1 million in illegal profits off of the information, which included unreleased earnings reports and details of pending mergers. In return, London received jewelry, a $12,000 Rolex watch and bags of money from Shaw, authorities say.

“These men broke ethical rules and criminal laws for the sole purpose of lining their pockets with illegal profits,” U.S. Attorney André Birotte Jr. said in a statement.

Shaw, who pleaded guilty to his own insider trading charge earlier this month, cooperated with the investigation after authorities uncovered the scheme. He will pay almost $1.3 million in restitution and could be sentenced to up to five years in prison. London, meanwhile, could face fines of up to $5 million in addition to the two decades of prison time.

Read more at Thomson Reuters.

For more InsideCounsel coverage of financial fraud, see:

SEC reaches final settlements in “Golden Goose” case

Gupta not liable to Goldman for Rajaratnam tips

Raj Rajaratnam’s younger brother charged with insider trading

Ex-Enron CEO reaches agreement with DOJ to reduce prison sentence

Alanna Byrne

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