Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Former KPMG partner in court for arraignment and procedural issues; on camera interview with CNBC

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Scott London was in court today on procedural matters regarding the criminal complaint alleging insider trading.

CNBC has a video interview with him.

The Wall Street Journal and Los Angeles Times have more details.

A few tidbits from the televised interview:

He estimates the amount he received is about $70. That would be $50K of cash, a watch he was told is worth about $10K, and 3 or 4 other pieces of jewelry he recently had appraised for just under $10k.

That makes about $70K. No mention of the concert tickets in the interview.

He insisted nothing like this has happened before.

Slippery slope

Here is the first info I’ve seen on how this developed:

The partial info in the video and printed article suggests there was a slippery slope. Started with complaining about things over dinner. You know how that goes, “those guys messed up my plans for Saturday ’cause they are gonna’ announce ….”  Then Mr. Shaw started trading. My guess is after some amount of trading Mr. Shaw gave Mr. London some money. Obviously the first few amounts were apparently accepted. The sharing of info continued. The cash continued.

That is part info from the interview, part from the text of the article, and part my guess.  Hope we hear more details.

Amount of gains

He thought that Mr. Shaw had only made about $200k.

His reaction when he found out that the profits were about $1.3M? According to the print report:

“I nearly threw up,” London said, recalling when he heard how much Shaw had made. “I was led to believe the number was far less, closer to $200,000.”

That’s an odd response.  I’m not sure why there would be increased distress from knowing the gains were around $1.3M instead of $0.2M. He would have found out that information after he had decided to confess. He would have already know he was going to jail.

Why do you think he was that much more upset?

What’s next?

He said he will get past this and get back to work since he has two children to put through college.

Court appearance

The Wall Street Journal reports KPMG Ex-Partner is Arraigned.

The Los Angeles Times reports Arraignment postponed for ex-KPMG auditor in insider-trading case.

Procedural things took place today.

A formal plea of not guilty was entered. A change will take place later, I think. The case will be transferred to the judge handling Mr. Shaw’s case. Boundaries of the travel restriction have been expanded. He wanted to turn over the jewelry but the appropriate agents who could accept the jewelry were not available.

As I post this, there are only those three reports visible from an internet search.

Update:  Pursing the case as only Going Concern can do, we can follow up on the comment on waiting tables in the interview: Let’s Ponder Scott London’s Potential Future in the Service Industry.

Written by Jim Ulvog

June 17, 2013, 18:06 pm at 6:06 pm

Posted in Audits

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