A former senior partner at KPMG LLP has been sentenced to 14 months in federal prison for giving insider information to a golfing buddy who used the tips to make more than $1.27 million in illegal stock trades.
Scott London, former chief of KPMG’s audit practice for the Pacific Southwest, who worked in Los Angeles, pleaded guilty on July 1 to a single felony count of insider-trading securities fraud. He admitted that he took $70,000 in cash, concert tickets and a $12,000 Rolex watch from his friend, Bryan Shaw, in exchange for confidential information about public companies including Herbalife Ltd. and Skechers USA Inc. KPMG fired London.
U.S. District Judge George Wu’s sentence, imposed on Thursday, is less than the three years that prosecutors sought. Wu also ordered London to pay a $100,000 fine.
London’s attorney, Harland Braun, of the Law Offices of Harland W. Braun in Los Angeles, said he had argued for six months to a year in prison. But he said the sentence was fair.
“I think the judge balanced his good character with this mistake that he made, plus the fact he was so cooperative and protective of his employer and their clients,” he said.
According to prosecutors, the two often met on a side street near Shaw’s jewelry business in Encino, Calif., exchanging bundles of $100 bills in bags. Shaw, who cooperated with the FBI during two cash exchanges, agreed to record telephone conversations in which London passed along the information, often from draft press releases.
Shaw, who pleaded guilty to one count of conspiracy, is scheduled to be sentenced on May 19. Sentencing papers are due May 5.
Both men settled separate charges by the U.S. Securities and Exchange Commission last year.
Contact Amanda Bronstad at firstname.lastname@example.org.