Reported Earlier:
Ex-KPMG Partner Accused of Passing on Tips About Herbalife,
Skechers
By Reed Albergotti
Federal prosecutors in Los Angeles are preparing to file a
criminal complaint Thursday against a former KPMG LLP partner who
has admitted to passing on inside information about this clients,
according to people familiar with the matter.
Scott London, the partner in charge of audits of Herbalife Ltd.
(HLF) and Skechers USA Inc. (SKX) until he was fired from KPMG on
Friday, is expected to face securities-fraud charges, these people
say. The development is the latest in a scandal that led to the
accounting firm resigning as auditor of the two companies.
Mr. London's attorney, Harland W. Braun, on Thursday said: "We
expected Scott to be charged at some point. He's fully
cooperating."
Mr. London has admitted to passing on stock tips about clients
to a friend in exchange for cash and gifts. On Tuesday, he told The
Wall Street Journal that "I regret my actions in leaking nonpublic
data to a third party." Mr. London said his leaks "started a few
years back," adding that KPMG bore "no responsibility" for his
actions.
"What I have done was wrong and against everything" he believed
in, said Mr. London, who was based in Los Angeles for the
accounting firm.
Mr. London is the latest professional to be snared in the
escalating drive by U.S. authorities against insider trading. The
Federal Bureau of Investigation, Justice Department and Securities
and Exchange Commission are investigating trading in the shares of
several KPMG corporate clients on the West Coast, according to
people familiar with the probes.
Write to Reed Albergotti at reed.albergotti@wsj.com.
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