(Corrects headline and paragraph six to KPMG instead of KMPG;
corrects paragraph one to Skechers instead of Sketchers)
By Ronald Grover and Dana Feldman
July 1 Scott London, a former senior partner
with accounting firm KPMG whose clients included Herbalife Ltd
and Skechers USA, pleaded guilty before a
federal judge in Los Angeles to a charge of securities fraud
arising from his involvement in insider trading.
London, 50, who supervised more than 500 accounting
professionals at KPMG, faces a maximum of 20 years in federal
prison and a maximum fine of $5 million or twice the gross gain
or gross loss resulting from his offense, according to the plea
The accountant admitted that he gave jeweler Bryan Shaw
inside information regarding at least 14 separate earnings
announcements or acquisitions by KPMG clients. The information
included Herbalife's May 2, 2011 earnings announcement and
United Rentals' (URI.N) December 16, 2011 announcement of its
acquisition of RSC Holdings, according to prosecutors.
London was accused of taking cash, concert tickets and
jewelry, including a Rolex watch, from his one-time golfing
buddy Shaw, who prosecutors say pleaded guilty earlier.
"I never did it for the money. I never asked for it, he
gave it to me and I took it," London said in an interview after
the hearing. "I did it to help someone whose business was
struggling. It was a bad, bad mistake."
Shaw received $1.27 million in illegal profits, according to
prosecutors, although London said he received only $50,000 and
thought the profits were closer to $200,000. He said no one else
at KPMG was involved.
London pleaded guilty before U.S. District Court Judge
George H. Wu. He is scheduled to be sentenced on Oct. 21.
(Reporting by Dana Feldman; Editing by Bob Burgdorfer)