Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Minor updates on insider trading fiasco at KPMG – 9-10-13

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Only a little news lately as we wait for sentencing of confessed insider traders.  Latest I’ve seen is that Scott London will receive his sentence on October 21 and Bryan Shaw on September 16.

Here’s two articles I’ve noticed:

8-3 – Spy team is Wall Street regulator’s weapon against insider traders – Gnom.es National News Service –

Background article on FINRA’s electronic monitoring of trades to search for insider trading.

FINRA is the organization that discovered insider trading by Scott London and Bryan Shaw.

They are the Financial Industry Regulatory Authority, a part of Wall Street that provides self-regulation. They are the successor to NASD.  They have no enforcement power, so they turn over their information to federal agencies for further investigation.

The article shows they have lots of trade data and more importantly have the ability to sift through it to find oddities.

9-6 – Venture County sheriff takes aim at rouge doctors, pharmacists – Pacific Coast Business Times

Another consequence for Mr. London – his name is a reference point for describing the severity of criminal investigations.

Ventura County sheriff has a Pharma Task Force looking at prescription drug abuse in the 101 corridor running from Camarillo to Westlake Village.  The suspicion is there are a number of doctors and a few pharmacies that are putting thousands of addictive prescription drugs on the street.  The task force has made a few arrests.

The end of the article links this to a string of high visibility bad-news stories in Conejo Valley, including the insider trading of Scott London and Brian Shaw. After describing their mess, the article describes their arrests as a “thunderbolt” in the valley. The shock waves from the few arrests so far in the pharma investigation are described as not quite as sharp as those from the London-Shaw fiasco.

Picture the conversation next year. Breathless lead reporter racing into editor’s office: “Hey boss, we got another London here, maybe bigger than London!” Editor yells, “hold the presses!”

How sad – Mr. London provides a frame of reference for DAs and reporters.

Update – Full disclosure – I haven’t mentioned it in a while, but I worked for KPMG a long time ago, in the distant past when it was called Peat, Marwick, Mitchell.

Written by Jim Ulvog

September 10, 2013, 7:31 am at 7:31 am

Posted in Audits

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  1. […] That’s the question raised by a reader after I posted this article yesterday: Minor updates on insider trading fiasco at KPMG. […]


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