KPMG LLP plans to take legal action against Scott London, its
ex-partner accused of insider trading, said John Veihmeyer, the Big
Four accounting firm's chairman and chief executive.
The firm intends to bring the action "in the near future," Mr.
Veihmeyer said in a statement issued Thursday night. He didn't
elaborate.
Mr. Veihmeyer said he was "appalled" when he reviewed the
criminal complaint federal investigators filed Thursday against Mr.
London, with previously undisclosed details about his conduct.
Authorities charged Mr. London with providing tips on five KPMG
clients to a friend, Bryan Shaw, who used the information to make
more than $1 million in trading profits. Both men have admitted
wrongdoing, and Mr. London has said KPMG wasn't involved in his
actions.
"We unequivocally condemn his actions, and deeply regret the
impact that his violations of trust and the law have had on our
clients and our people," Mr. Veihmeyer said.
Mr. Veihmeyer's statements were his first public comments on the
matter since KPMG disclosed Monday evening that it had fired one of
its partners, later identified as Mr. London, after he had provided
inside information about KPMG clients. The firm quickly fired Mr.
London, a partner in charge of its audit practice in its Los
Angeles office, and resigned as auditor of two clients for which
Mr. London served as lead partner, Herbalife Ltd. (HLF) and
Skechers USA Inc. (SKX).
Mr. Veihmeyer said KPMG resigned from those two clients because
"it was clear that our independence had been impaired" with respect
to them. He reiterated, as KPMG has said previously, that he had
"no reason to believe" there were any misstatements on either
firm's financial statements.
Write to Michael Rapoport at michael.rapoport@wsj.com
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