Federal prosecutors in Los Angeles filed criminal charges Thursday against a former KPMG LLP partner who has admitted to passing on inside information about his clients.
Scott London, the partner in charge of audits of Herbalife Ltd. HLF +2.82% and Skechers USA Inc. SKX +1.69% until he was fired from KPMG on Friday, also was hit with civil securities-fraud charges by the Securities and Exchange Commission. The development is the latest in a scandal that led to the accounting firm resigning as auditor of the two companies.
London was charged with one count of conspiracy to commit securities fraud through insider trading, according to the criminal complaint. He faces up to five years in prison and a $250,000 fine. The complaint said the trades generated a profit of more than $1 million for his friend, Bryan Shaw.
Former KPMG partner admitted to passing on inside information about his clients.
The complaint also says London tipped off Shaw about five KPMG clients, more than was previously known.
In exchange, according to the complaint, London received bags containing $100 bills wrapped in $10,000 bundles, concert tickets, and a Rolex watch.
