June 2 (Reuters) - A southern California jeweler who made $1.6 million from insider trading on tips from former KPMG LLP senior partner Scott London about that firm’s clients was sentenced on Monday to five months in prison, federal prosecutors said.
The defendant, Bryan Shaw, was sentenced by U.S. District Judge George Wu in Los Angeles after pleading guilty in May 2013 to one count of conspiracy.
Shaw was not fined, having already paid about $1.9 million comprising illegal profit and a civil penalty in a settlement with the U.S. Securities and Exchange Commission.
The prison term was shorter than recommended under federal guidelines. Prosecutors said a reduction was justified by Shaw’s confession and “complete cooperation,” including his willingness to record London and his “effectiveness” in those recordings.
London was sentenced to 14 months in prison on April 24 for providing tips to Shaw. He also pleaded guilty.
Prosecutors said London tipped Shaw about at least 14 acquisitions or earnings announcements by KPMG clients, including Herbalife Ltd and Skechers USA Inc.
In return, the Encino jeweler allegedly paid London more than $60,000 in cash, plus gifts such as a Rolex watch and Bruce Springsteen concert tickets.
Prosecutors had sought a six-month prison term for Shaw. The defendant sought probation.
“Mr. Shaw has led a 53-year life marked overwhelmingly by honesty, integrity, and hard work,” his lawyer Nathan Hochman said in an emailed statement. “He made a serious mistake in getting involved in insider trading with Scott London but then did everything he could to right that wrong.”
Before his April 2013 arrest, London had worked for 29 years at KPMG and been head of its audit practice in Los Angeles, supervising more than 500 people. London was ultimately fired. KPMG was not charged.
The case is U.S. v. Shaw, U.S. District Court, Central District of California, No. 13-cr-00314. (Reporting by Jonathan Stempel in New York. Editing by Andre Grenon)