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Posts Tagged ‘insider trading

News on regulatory oversight; insider trading, livings wills, manipulating interest rates.

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Image courtesy of DollarPhotoClub.com

Image courtesy of DollarPhotoClub.com

Interesting news from the financial world:

  • How NASDAQ watches for insider trading
  • Why bank regulators not disclosing the criteria for evaluating “living wills” causes more systemic financial risk
  • Enforcement efforts on two interest-rate manipulation fiascos

Here is how you get caught for trading on inside information

6/10 – Francine McKenna at MarketWatch – How NASDAQ watches for insider trading – Deep background on how NASDAQ monitors all the trading in the market for suspicious activity. They have a variety of tools and techniques to identify anomalies and drill down to eventually reach the individual trades.

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Written by Jim Ulvog

June 14, 2016, 7:53 am at 7:53 am

Number of Scott London’s insider trading incidents based on cross-referencing SEC action, plea agreement, and FBI complaint.

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FBI surveillance photo of Mr. Shaw passing $5,000 to Mr. London. Photo is included in the criminal complaint available in PACER system and thus is a public document.

FBI surveillance photo of Mr. Shaw passing $5,000 to Mr. London. Photo is included in the criminal complaint available in PACER system and thus is a public document.

Previously discussed the SEC enforcement action against now-felon, formerly-living-on-top-of-the-world KPMG regional audit partner Scott London for his insider trading activities.

After reading the criminal complaint along wot the SEC’s action, I now think the actual number of incidents of insider trading is two or three times more than even the SEC claims.

The enforcement action listed 18 specific incidences of insider-trading. This is larger than any number I’ve seen previously, which drew my interest. My recollection is there had been around a dozen or so incidents. Decided to compare three documents to see what they show about the extent of insider-trading. I looked at:

If you want to read the plea agreement and criminal complaint, I provided links here.

The plea agreement states there were at least 14 incidents. The criminal complaint cites a slightly small number but that is a soft estimate by Mr. London. What caught my attention is the SEC enforcement action lists 18 incidents.

The SEC’s listing includes: Read the rest of this entry »

Written by Jim Ulvog

January 12, 2016, 8:15 am at 8:15 am

Posted in Audits, Other stuff

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Criminal complaint against Scott London and his plea agreement

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Housing option earned for insider trading. Image courtesy of DollarPhotoClub.com

Long term federal housing earned for insider trading. If my opinion matters to you, I heartily recommend you avoid this housing. To do so, avoid insider trading. Might be good to avoid a lot of other things the FBI is not amused with. Image courtesy of DollarPhotoClub.com

Because the materials available from the federal PACER system are public documents, I am allowed (along with anyone else who signs up for the service) to publish them.

Thus, for your reading pleasure and future research, here is the criminal complaint against Scott London, dated April 11, 2013: Read the rest of this entry »

Written by Jim Ulvog

January 12, 2016, 7:26 am at 7:26 am

Posted in Audits, Other stuff

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Followup on SEC enforcement action against Scott London

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Housing option earned for insider trading. Image courtesy of DollarPhotoClub.com

Housing earned as reward for insider trading. Image courtesy of DollarPhotoClub.com

Back in September 2013 I briefly discussed the SEC’s enforcement action against former KPMG partner Scott London over his insider trading activities: Ex-KPMG partner banned from practice before the SEC; sentencing date is in December.

Just realized last week I had not actually read the enforcement action. So I went back and took a look at it. You can find it here.

One thing that jumped out at me was the SEC asserted there were 18 specific incidences of passing inside information. That prompted me to dig a little deeper and write this and the next post.

Why going to this detail? Seems to me there is some ongoing interest in Scott London’s case. I am not aware of anyone who has chronicled the story in the depth that I’ve gone into. Perhaps that’s because there’s relatively limited interest in an old case. Perhaps nobody else is interest in such trivial details as the exact number of insider-trading incidents. I’ll dive into the details anyway. Perhaps I’m just weird, but I’m interested.

Here goes…

Context of timing

The SEC Accounting and Auditing Enforcement is dated September 27, 2013.

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Written by Jim Ulvog

January 11, 2016, 7:52 am at 7:52 am

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Scott London interview with NPR’s Planet Money

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On December 23, Planet Money aired an interview with Scott London: Episode 671: An Insider Trader Tells All. He is the now-felon, formerly KPMG regional audit partner who earned 14 months in federal housing for insider trading.

There are a couple of new pieces of information in the interview. More on that in a moment.

Rumbi Bwerinofa discusses the interview at Figuring Financial Forensics: On The Record.

She was amused at the description of Mr. London’s shock at finding out the amount of the gains realized by his buddy, Bryan Shaw. In the interview Mr. London says he was in a car with his attorney driving him somewhere as Mr. London read in the newspaper the amount of the gains being in the range of over a million dollars. He asked his attorney to pull the car over because he thought he was going to be physically ill.

Ms. Bwerinofa points out fraud usually develops this way. Schemes start small and then grow to something huge. Having been given only $70,000, Mr. London thought this was still in the range of small potatoes.

She ponders whether Mr. London had previously pondered the idea that there is no honor among thieves. He apparently did not consider that his cheating friend could be cheating him.

Mr. London pointed out in the interview, and earlier comments, that the proceeds were going to be split three ways. That would imply that the total illicit gains would have been in the range of $200,000 or so. Not well over $1,000,000, perhaps as much is $1.6M.

Willfully crossing the line?

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Written by Jim Ulvog

January 8, 2016, 10:04 am at 10:04 am

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Scott London is officially out of custody

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On July 23, 2015, Scott London was officially released from federal custody after serving his prison term for insider trading.

Does it seem like a long time since you read of him being sentenced? Well, that’s what 14 month in prison looks like. How much of your life have you enjoyed since he went away?

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Written by Jim Ulvog

August 10, 2015, 7:12 am at 7:12 am

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Post-release interview with Scott London – 1

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Just finished watching a 2 hour webcast from CPA Crossings. Gary Zeune interviewed Scott London on what got him into prison on an 14-month sentence for securities law violation.

This interview will be available again on June 18 and June 22. More info here.

The four-hour interview from last June, before Mr. London reported to prison, will be broadcast again on June 15, 25, and 30. More info here.

I heartily recommend the webcast. If you are looking for an ethics course that’s a lot more interesting than the typical “here are the rules” presentation, check out one or both of the above webcasts.

I will have several articles on the interview over the next few days. Will talk about one part of the interview now –

Incarceration timeline

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Written by Jim Ulvog

June 8, 2015, 12:46 pm at 12:46 pm

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