A few links and comments of interest to auditors: audit quality indicators as outcomes or outputs; lighthearted view of how you can steal too; are financials unauditable? …
More good stuff for auditors – 4-28 Read More »
KPMG provided me the following statement regarding the sentencing yesterday of Scott London:
It was appropriate that Scott London was held accountable today for the consequences of his illegal and unethical actions.
An extremely vague, hard to understand comment in the CNBC report yesterday, yes, the one wherein the camera operator ran the camera lens into the side of Mr. London’s face, indicated KPMG had taken some financial action against Mr. London. The article cited Mr. London’s attorney as saying that matter had been resolved through the partnership agreement. I don’t understand what that means, but my wild guess is the partnership agreement allowed closing out his retirement account or possibly putting that on hold for the moment. I’ll make another wild guess that he wasn’t allowed to pull any money out of his retirement account.
My businessman’s understanding of the law suggests the guilty plea followed by sentencing would clear the deck to let KPMG proceed with litigation against Mr. London to recover their costs. My wild guess is that KPMG quickly reimbursed Herbalife for the cost of reauditing the Herbalife financial statements for three years. My further guess is that KPMG will be looking to Mr. London for reimbursement, likely through litigation.
The story isn’t over. I’ll keep you updated over the next many months.
KPMG response to Scott London sentencing; possible next step for firm Read More »
After the sentencing yesterday for former KPMG partner Scott London, I was confused by conflicting comments indicating the defense had both requested probation and a short jail sentence during the hearing. Those seem to be contradictory positions.
The Wall Street Journal article Former KPMG Partner Scott London Gets 14 Months for Insider Trading helps me put a few pieces together.
…
Sequence of arguments for sentencing in Scott London caseRead More »
Sequence of arguments for sentencing in Scott London case Read More »
Now we can count some of the hard and soft consequences in Scott London’s insider trading journey.
Jail time
From news reports of the day, here is his sentence: …
Judicial consequences and small consequences for insider trading – #12Read More »
Judicial consequences and small consequences for insider trading – #12 Read More »
A few quotes are filtering out in news reports about the sentencing today for Scott London over his admitted insider trading.
The Wall Street Journal provides the following quote in their article, – Former KPMG Partner Scott London Gets 14 Months in Prison for Insider Trading: …
The Los Angeles Times is reporting KPMG partner who gave tips to golf buddy sentenced for insider trading.
Stuart Pfeifer reports Judge George Wu sentenced Scott London to 14 months in federal prison and a $100,000 fine.
Defense counsel had argued for 6 to 12 months, according to the article.
More info to follow.
Update 1 at 12:35:
First 4 visible articles:
14 months for Scott London in insider trading case Read More »
As of 7:00 this morning, the federal PACER system still shows an order that sentencing will take place today, 4/24, at 11:00 Pacific time.
…
Sentencing for Scott London still set for 11:00 a.m. todayRead More »
Sentencing for Scott London still set for 11:00 a.m. today Read More »
The sentencing for Scott London on his guilty plea for insider trading has been moved back three hours. As of 4/21 he is still scheduled to be sentenced this Thursday, 4/24, but will be appearing at 11:00 a.m. Pacific time instead of 8:00 a.m.
I took a look at the docket this afternoon and found a few items that may be of wider interest.
Sentencing documents
Lots of documents have been filed under seal since my last post on sentencing. The government’s sentencing memorandum was filed on 4/7; item #47 on the docket. I discussed the government’s recommendation here and here.
…
London sentencing watch – scheduled for 4/24 at 11 am as of 4/21Read More »
London sentencing watch – scheduled for 4/24 at 11 am as of 4/21 Read More »
I’ve not been reading the federal court filings for Mr. Bryan Shaw, partner in crime of former KPMG partner Mr. Scott London. Started looking at them this evening.
Most pertinent information at the moment is that his sentencing hearing is scheduled for May 19, 2014 at 8 a.m.
The sentencing has been postponed several times.
…
On 4/14/14, the U.S. Attorney and Scott London’s attorney filed a request to postpone the sentencing hearing for Mr. London from April 21 to April 24.
The reason cited is that Mr. London’s attorney will be out of town on Monday. The filing says the court clerk indicated there is time available in the schedule on Thursday.
The court has not issued the order, but I would assume that it will easily be approved.
So we will wait patiently for a week from Thursday.
Update: 14 months.
London sentencing watch – request filed to continue hearing three days, to April 24 Read More »
A Mr./Ms. sjenson has been commenting on my blog about some family assets belonging to the London family that have apparently been moved into a Nevada corporation.
You can see the current discussion at an older post, Sentencing recommendation and suggestion for lighter sentence for ex-KPMG partner’s insider trading.
The commenter has several thoughts and questions.
The core of his/her idea seems to be wondering why assets would be moved into a Nevada corporation. If you have ever had contact with one of those outfits, you know they operate in a completely different world.
Check out the comments if you are interested.
His or her comments belong to him. Anyone have any thoughts or comments on the comments? All comments welcome. Of course, subject to maintaining a professional demeanor with the determination of what is professional being made by me!
Update: 14 months.
Observations from a reader on Scott London’s family assets Read More »
Michael Rapoport reports yesterday in the Wall Street Journal on the sentencing filings: U.S. Attorney Asks Judge for Three Year Sentence for Former KPMG Partner.
I discussed this yesterday.
Almost bruised my jaw when it hit the keyboard after reading this sentence:
Harland Braun, Mr. London’s attorney, has requested a sentence of probation for his client, with no jail time.
Probation. Really? Yes.
That paragraph continues with quoting Mr. Braun from an interview on Tuesday.
How did I miss that when reading the government’s probation recommendation?
…
Scott London asked for probation for insider tradingRead More »
Scott London asked for probation for insider trading Read More »
The U.S. Attorney and Scott London both filed their sentencing position papers on April 7. This is in advance of the sentencing, expected this month.
Mr. London will file his sentencing position brief under seal, according to a filing from his attorney. That means we won’t be reading his arguments, as presented in the filing, anytime soon.
The government’s filing mentions there will be a sentencing hearing on April 21, 2014 at 8:00 a.m. That means that as of 4/7, the hearing is still set for 4/21, as previously mentioned in court filings.
The US Attorney is recommending 3 years in prison, 3 years supervised release, and a $100,000 fine. (There’s also a $100 special assessment. I have no idea {yet} what that is for.)
Prison term
…
Sentencing position papers filed with court in Scott London insider trading caseRead More »
Sentencing position papers filed with court in Scott London insider trading case Read More »
A few links and comments of interest to auditors. A ridiculous suit against a Big 4 firm, reminder on confirmations, a Big 4 partner on his way to jail, and three articles on whether PCAOB is exaggerating the severity of inspection results.
3/31/14 – Jonathan Weil at Bloomberg View – Go Ahead, Blame the Accountants – In a tweet pointing to the article, Mr. Weil wonders what is happening to him, what with defending a Big 4 accounting firm. The lawsuit from failed MF Global Holdings against their auditor, PwC, is a source of some amusement when the details are considered. MF Global accuses PwC of causing MF Global to violate GAAP.
…
More good stuff for auditors – 4-2-14 Read More »
Short answer: Yes.
Long answer: If there is a component included in the financial statements then Special Considerations—Audits of Group Financial Statements (Including the Work of Component Auditors) found in AU-C Section 600 applies to your audit.
The simple illustration of a component is a consolidated subsidiary. Other examples include a division, geographical location, or subunit of a governmental agency.
So, you can’t dismiss group audits just because you are the only auditor on the engagement.
…