Former KPMG partner Scott London has been sentenced to 14 months for insider training by a Los Angeles federal judge last Thursday.

London was charged in April 2013 of selling secret information about KPMG’s clients to a stock trading friend, Bryan Shaw, who made $1.27m in profitable trades as result of London’s tips.

Subsequently, London pleaded guilty and admitted receiving around $66.000 in cash and gifts from his friend Shaw.

The defense argued that London acted to help a friend whose business was failing. Judge George Wu dismissed this argument saying that by the 14th time London engaged in the activity, it wasn’t inadvertent, according to a report by The Telegraph.

From the beginning of the proceedings, London said KPMG wasn’t involved in his actions.

As a result of London’s illegal activities KPMG had to resign as auditors of US companies Herbalife and Skechers, which were both audited by London.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData

Tick here to opt out of curated industry news, reports, and event updates from International Accounting Bulletin.

Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Following London’s sentencing, KPMG released the following statement: "It was appropriate that Scott London was held accountable today for the consequences of his illegal and unethical actions."

Last year, KPMG chairman and chief executive John Veihmeyer announced that the firm would seek legal actions against London. "I was appalled to learn of the additional details about Scott London’s extraordinary breach of fiduciary duties to our clients, KPMG and the capital markets," Veihmeyer said. "KPMG will be bringing legal actions against London in the near future."

Former KPMG US partner faces three years prison sentence for insider trading