Former KPMG Auditor Receives 14-Month Sentence

Scott London, the former KPMG partner convicted of insider trading, has been sentenced to 14 months in federal prison, the Los Angeles Times reported.

London pleaded guilty last year, admitting that he gave confidential information about KPMG clients, which included Herbalife and Skechers, to a friend, Bryan Shaw. Shaw used the information to make more than $1 million in stock profits.

U.S. District Judge George Wu handed down the prison sentence April 24 and also ordered London to pay a $100,000 fine. The defense asked for a six- to 12-month sentence while the prosecution wanted three years.

“I deeply regret my actions,” London told the court, according to the Wall Street Journal. “I’m embarrassed and ashamed…I blame no one but myself.”KPMG_Insider_Trader__Wendy_Pierro@vcstar_com_3_t607

A senior partner in charge of audits for California, Arizona and Nevada clients, London gave Shaw inside information at least 14 times, according to prosecutors. They said, for example, that London told Shaw that a KPMG client, Pacific Capital Bancorp, was about to be purchased by Union Bank in February 2012, a month before the public announcement that sent stock prices soaring. Shaw made $365,000. In return for information, Shaw gave London expensive gifts, such as a Rolex watch, concert tickets and cash.

When regulators questioned his perfectly timed trades, Shaw agreed to cooperate and secretly recorded conversations. Shaw pleaded guilty as well and will be sentenced May 19, the Times reported.

KPMG fired London, and Skechers and Herbalife needed to hire new accountants and restate earnings.

London did not comment as he left the court, but his attorney, Harlan Braun, called the sentence “fair,” CNBC reported. He has until July 18 to report to prison.