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.
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."