(The following press release from the United States Attorney's Office for 
the Central District of California, Los Angeles, was received by e-mail and was 
reformatted. The sender verified the statement.) 
Issued on Tuesday, May 28 at 3:30 p.m. PDT 
Former Senior Partner at KPMG Agrees to Plead Guilty in
Los Angeles to Federal Charges Related to Insider Trading Scheme 
Former Chief of KPMG's Audit Practice in Southwest Admits He Passed 
Confidential Information in Exchange for Cash Bribes 
LOS ANGELES - A former senior partner at the accounting firm KPMG LLP 
has agreed to plead guilty to securities fraud for his involvement in an 
insider trading scheme in which he provided confidential information to a man 
who paid him with cash bribes and luxury items.                                  
Scott London, 50, of Agoura Hills, who oversaw KPMG's audit practice 
for the Pacific Southwest, was charged today in a criminal information with one 
count of securities fraud through insider trading. In a plea agreement also 
filed today in United States District Court, London agreed to plead guilty to 
the felony count that carries a statutory maximum penalty of 20 years in 
federal prison.                                                                  
According to court documents, London provided confidential information 
about KPMG clients to Bryan Shaw, a close friend of his, over a period of 
several years. Shaw then used this information to make highly profitable 
securities trades that Shaw has admitted earned him more than $1 million 
dollars in illegal proceeds.                                                     
"Over the course of several years, Mr. London secretly fed 
confidential, insider information to a man he knew would use that information 
to make trades," said United States Attorney André Birotte Jr. "Behavior like 
this is an affront to people who follow the law and compromises the public 
perception in the inherent fairness of the markets by creating an uneven 
playing field. As a result of his illegal conduct, Mr. London has agreed to 
plead guilty and will face a lengthy prison term."                               
Bill L. Lewis, the Assistant Director in Charge of the FBI's Los 
Angeles Field Office, stated: "This case illustrates the FBI's commitment to 
investigating insider trading and working to ensure integrity in our financial 
markets. "We will continue to work with our partners to identify, investigate 
and prosecute securities fraud cases in order to maintain that confidence in 
the marketplace."                                                                
London was a senior partner at KPMG who supervised more than 500 
accounting professionals at the firm and personally handled audits for major 
KPMG clients, including Herbalife Ltd. and Skechers USA, Inc. As a result of 
his position, London had access to confidential information about KPMG's 
clients before that information was disclosed to the public. In his plea 
agreement, London admitted that he disclosed inside information to Shaw 
regarding at least 14 separate earnings announcements or acquisitions for KPMG 
clients, including:                                                              
Herbalife's May 2, 2011 Earnings Announcement; 
United Rentals' December 16, 2011 Announcement of its Acquisition of 
RSC Holdings; 
Herbalife's February 21, 2012 Earnings Announcement; 
Deckers Outdoors' February 23, 2012 Earnings Announcement; 
Union Bank's March 12, 2012 Announcement of its Acquistion of Pacific 
Capital Bancorp; and 
Deckers Outdoors' April 26, 2012 Earnings Announcement                   
Shaw has admitted that he gave London tens of thousands of dollars in 
cash in exchange for the inside information about KPMG's clients. According to 
court documents, Shaw also said that he typically arranged to meet London on a 
side street near Shaw's business so that he could give London bags containing 
$100 bills wrapped in $10,000 bundles. Shaw also said that he gave London a 
$12,000 Rolex Daytona Cosmograph watch, as well as jewelry and concert tickets, 
in exchange for the confidential information.                                    
On two occasions earlier this year, acting at the direction of the 
Federal Bureau of Investigation, Shaw met with London and gave him cash as 
supposed payment for confidential information about KPMG clients, according to 
court documents. In the first instance, London met with Shaw on a street corner 
in Encino and accepted a bag with $5,000 in cash as payment for confidential 
information about Herbalife's earnings announcement in February 2013. London 
later met with Shaw in a parking lot in Woodland Hills and accepted another bag 
with $5,000 in cash, which was supposedly London's share of the illegal profits 
from trades based on confidential information about Decker's February 2013 
earnings announcement.                                                           
London is currently scheduled to appear in United States District Court 
on Friday afternoon for an arraignment, but it is expected that this hearing 
will be continued to a later date.                                               
Shaw pleaded guilty to a conspiracy charge on May 20 before United 
States District Judge George H. Wu, who scheduled a sentencing hearing for Shaw 
on September 16 (for background on Shaw's plea, see:                        
The criminal investigation into the insider trading scheme was 
conducted by the Federal Bureau of Investigation. 
CONTACT:        Assistant United States Attorney James A. Bowman 
Major Frauds Section 
(213) 894-2213 
Release No. 13-074 
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