Yahoo Finance KPMG's London In Insider Trading Guilty Plea
A former senior partner with accounting giant KPMG has agreed to plead guilty to fraud over his involvement in insider trading, officials have confirmed.
Scott London, 50, supervised more than 500 accounting staff at KPMG and oversaw audits of Herbalife (NYSE: HLF - news) and Skechers, prosecutors in Los Angeles say.
He faces a maximum term of 20 years in federal prison and a maximum fine of $5m (£3.3m) or twice the gross gain or gross loss resulting from his offence, according to the plea agreement.
London's plea comes around a week after his one-time golfing buddy Bryan Shaw pleaded guilty to one count of conspiracy to commit securities fraud for his role in the scheme.
Jeweller Shaw was apparently under scrutiny after his stockbroker noticed unusual share trade patterns.
The FBI then investigated his links to London and bugged telephones over insider trading.
He gave London cash, an expensive watch and other gifts in exchange for tips on Herbalife, Skechers and other companies that helped him generate more than $1m (£600,000) in illegal profits, prosecutors say.
Shaw sometimes gave London bags filled with cash at meetings on street corners and in parking lots, according to the prosecution.
In his plea agreement, London admitted he gave Shaw inside information regarding at least 14 separate earnings announcements or acquisitions by KPMG clients.
Shaw agreed to pay around $1.3m in restitution and will continue to cooperate with the government's investigation as part of his plea.
London is scheduled to appear in federal court on Friday, though that will likely be pushed back, according to the US Attorney's Office in Los Angeles.
Shaw, who pleaded guilty on May 20, has a sentencing hearing on September 16.
Manuel Goncalves, a spokesman for KPMG, did not immediately return requests for comment.
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