Bryan Shaw, a trader who said he received insider tips from fired KPMG LLP partner Scott London, apologized and said he’s been cooperating with the Justice Department and U.S. Securities and Exchange Commission.
“During 2010 through 2012, I received non-public information from Scott London about a number of companies and then profited substantially from stock trades based upon that information,” Shaw said in a statement provided yesterday by Nathan Hochman, a lawyer at Bingham McCutchen LLP in Santa Monica, California. “I cannot begin to apologize for my incredibly stupid actions.”
London was the head of KPMG’s audit practice in Los Angeles. The firm said in an April 8 statement that he was fired after KPMG learned he had provided inside information to someone who used it to trade shares of several West Coast companies. London wasn’t identified by name in the statement.
Herbalife Ltd. and Skechers U.S.A. Inc. said in statements on April 9 that KPMG was withdrawing as their auditor.
London, in an April 9 e-mailed statement, said he leaked information by phone over a period of years to a person who traded on those tips. London, who didn’t return messages seeking comment, said he was trying to help a person whose business was struggling.
Shaw is listed in online business directories as a partner with Encino, California-based Shaw Diamond Co., a wholesale jeweler and diamond broker founded in 1957.
“Over the past several months, I have fully cooperated with the FBI, the SEC, and the U.S. Department of Justice in their ongoing investigation of this matter,” Shaw said in his statement. “I expect that my actions will result in significant civil and criminal consequences, but I realize that this is the painful price I will pay for my transgressions.”
London was the lead auditor for Skechers, according to David Weinberg, the shoemaker’s chief financial officer. Senior KPMG executives visited Skechers on April 8 and told Weinberg about the misconduct, he said. They said no questions were raised about the company’s financial reports and that they believe London is the only auditor involved, he said.