BBC News, 29
May 2013
Related
Stories
- Ex-KPMG partner on insider charges
- KPMG quits audit roles over claims
- Tax laws 'influenced by big firms'
 |
| Scott London, the former KPMG senior partner, faces a 20-year prison sentence and a $5m fine |
A former
senior partner at accountancy giant KPMG has agreed to plead guilty to insider
trading.
US
authorities had charged Scott London in April for allegedly passing information
to a golfing friend, who then traded on the share trips.
His plea
agreement was announced on Tuesday at the US Attorney's Office in Los Angeles.
It came a
week after the friend, Buddy Shaw, pleaded guilty to one count of conspiracy to
commit securities fraud.
In his plea
agreement, Mr London admitted giving Mr Shaw insider information about KPMG's
clients on at least 14 different occasions.
It includes
US company Herbalife's 2 May 2011 earnings release and United Rentals' 16
December 2011 announcement to take over RSC Holdings.
Mr London,
50, faces a maximum term of 20 years in prison and a maximum fine of $5m
(£3.3m), according to the plea agreement.
"Behaviour
like this is an affront to people who follow the law and compromises the public
perception in the inherent fairness of the markets by creating an uneven
playing field," said US Attorney Andre Birotte Jr.
Separately,
Mr Shaw agreed to pay around $1.3m in restitution and will continue to
co-operate with the investigation as part of his plea.
According
to the criminal and civil charges filed in April, in addition to telling Mr
Shaw, a jeweller, about the merger between RSC Holdings and United Rentals, he
also told him about a takeover of Pacific Capital Bancorp by Union Bank.
In return
for the information, Mr London allegedly received bags of cash and jewellery,
including a $12,000 Rolex watch. According to prosecutors, the tip-offs helped
Mr Shaw earn more than $1m in illegal profits.
It is
thought that the authorities were first alerted to possible wrongdoing when Mr
Shaw's stockbroker noticed unusual share trading patterns.
Investigators
then reportedly tape-recorded Mr London passing on information.
The scandal
has hit the accountancy firm's reputation. It resigned as auditor from a number
of US companies including Herbalife and Sketchers soon after the claims
emerged.
Mr London
is scheduled to appear in federal court on Friday, while Mr Shaw has a
sentencing hearing on 16 September.
Related Article:
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.