Former KPMG Los Angeles office lead audit partner Scott London has pleaded guilty to insider trading charges before a US federal judge.
In April, London was alleged to have tipped off his friend, Bryan Shaw, with confidential details about five KPMG audit clients and enabled Shaw to make more than $1.2m profit by trading ahead of earnings or merger announcements.
Following an insider trading alert by the US Securities and Exchange Commission, KPMG sacked London and the firm had to step down as auditor of health care group Herbalife and shoe manufacturer Skechers due to impairment of independence.
London is facing up to 20 years in jail and a large financial fine for his offences.
The sentencing is scheduled for October.