insider trading

Scott London was interviewed at length during a CPE webcast presented June 25, 2014. The class was presented by Gary Zuene, of The Pros & The Cons.

Mr. London was remarkably open.

He repeatedly accepted full blame for the insider trading. At several points he explained the context, pressures he was under, and actions by others (especially his golfing buddy) that help us understand the situation better. Each time he mentioned something outside of himself he again said that he is responsible. He is to blame.

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Interview with Scott London during CPE webcastRead More »

Two interviews of Scott London have appeared quite recently in advance of his marathon interview in a CPE class:

• 6/21 – Quentin Fottrell at Market Watch – Confessions of an insider trader on the eve of his prison sentence
• 6/16 – Walter Pavlo at Forbes – Fmr KPMG Partner Scott London Shares Cautionary Tale Before Prison

A few ideas from each of the interviews and a few of my observations.

Quentin Fottrell at Market Watch –

Mr. London perceives that insider trading is rampant.

He asserts he received about $50,000 in total, which includes the Rolex (which he rarely wore), and concert tickets.

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2 interviews with Scott LondonRead More »

Well, at least I think it will be the event to see. Next Wednesday, June 25, Scott London will be interviewed in a webcast presented by The Pros & The Cons.

To my recollection, all the previous interviews of Mr. London were brief events entering or leaving a court room. There have been a few conversations with reporters, but nothing in detail. This will be the first, in-depth interview I know of. Several hours will allow the time to give full, nuanced answers and explore follow-up questions.

Gaylen Hansen, former chair of the NASBA Ethics Committee will be the lead interviewer. Gary Zuene recently announced the Michael Sallah, investigative journalist from The Washington Post, has joined the interviewing team. Looks to be a great team of interviewers.

Block out 1 to 5 Eastern / 9 to 1 10 until 2 Pacific time for a 4 hour ethics class.

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CPE event of the year – 4 hour ethics class featuring interview with Scott LondonRead More »

After the sentencing of Scott London to 14 months in prison, KPMG issued me (and the rest of the world) a statement saying:

It was appropriate that Scott London was held accountable for the consequence of his illegal and unethical action.

As I mentioned earlier, there were some comments in public by Mr. London’s attorney that KPMG and Mr. London had worked out something through the partnership agreement. My guess is they closed out his capital account.

My guess at the time was that the sentencing cleared the path for KPMG to sue Mr. London. They would definitely have cause since the Herbalife reaudit cost around $15M, and they probably sent the bill to KPMG, who probably paid it quickly. I’ll guess that KPMG paid for the reaudit of the other two clients.

So, will KPMG sue Mr. London?

When I tweeted about my post, Francine McKenna followed up with a tweet saying something to the effect that this was the end of the case. Nothing else would be heard.

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Why KPMG won’t be suing Scott LondonRead More »

The sentencing documents are available on the federal PACER system for Bryan Shaw’s conspiracy conviction. Not really any new information. Did want to mention what is listed there. Also want to mention tracking info in the Bureau of Prison’s system for both Mr. Shaw and Mr. London.

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Minor details of Bryan Shaw’s sentencing for insider trading caseRead More »

Found some more comments from coverage of the sentencing for Scott London that change the perception of the hearing. At least it changes my perception. Mentioned this earlier here. Wish I had been in the sentencing hearing.

Look at the comments I mentioned earlier:

The Wall Street Journal – Former KPMG Partner Scott London Gets 14 Months in Prison for Insider Trading: …

More context on the sentencing hearing for Scott London. Why I am writing so much about this case.Read More »

Initial report at about 12:25 from CNBC: 5 months in prison.

Will update during day as more reports become visible.

Updates:

Reuters reports Jeweler who traded on ex-KPMG partner’s tips sentenced to prison. Report says five months in prison. No fine, in light of $1.9M already paid to SEC as penalty and disgorgement. Prosecution was only asking for $3K fine; that is a minor difference between $0 and $3K.

Los Angeles Times runs that infamous parking lot photo at top of article: Informant in KPMG insider trading case sentenced to 5 months in prison. The reporter, Riley Snyder, was obviously in court during sentencing provided some of the context you won’t otherwise see in reporting or transcripts:

Shaw, who was joined by several family members in court, fought through tears to deliver a handwritten apology to Wu before the sentencing.

You will never, ever see me again,” Shaw said, his voice quivering.

Post-Periodical – Encino Jeweler Sentenced for Insider Trading – Also, 3 years supervised release.

5:30 update – From the few stats available on my site, it looks like there are quite a few people clicking through to the articles linked above. Good. I’ll provide a few more:

The State – LA merchant gets prison for insider trading – This is the Associated Press version of the story, which will appear in many places. It is rather short. Won’t give any new info to anyone who has visited this blog, but is a good 20 line summary.

LA Business Journal – Insider Trading Co-Conspirator Sentenced – Extremely short summary – 12 lines.

6/3 update:

LA Times article by Riley Snyder updated at 7:01 p.m. – Bryan Shaw sentenced to prison in KPMG insider trading case.  A few new details.  The judge recommends a federal facility for nonviolent offenders, either in Lompoc or Taft.  Upland’s ex-mayor, John Pomierski, served his time in Taft. Mr. Shaw has 60 days to report, which would be about 8/2.

Update: Mr. Shaw released on 11/28/14 after serving 5 months.

UPDATE – sentencing coverage in this post.

The federal PACER system does not show any updates as of the evening of 6/1 that would change the scheduled sentencing of Bryan Shaw on 6/2 for conspiracy for his insider trading based on information provided by former KPMG partner Scott London. Scheduled for 8:00 a.m. on June 2.

The defense has filed a supplemental sentencing document that spells out in more detail the cooperation provided by Mr. Shaw. I read through it and glanced at the initial complaint against Mr. London. Here are a few highlights:

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Bryan Shaw sentencing watch. – Update on chronology.Read More »

On May 5, the presiding judge postponed sentencing from May 19 to June 2 for Bryan Shaw, who pled guilty to insider trading. He  based his trades on information provided by Scott London, formerly regional audit PIC for KPMG.

The U.S. Attorney is requesting 6 months in jail, 3 years supervised released, and a $3,000 fine.

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Sentencing date postponed for inside trader Bryan Shaw; Feds request 6 monthsRead 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.

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.

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Sequence of arguments for sentencing in Scott London caseRead 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 »

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: …

Other than that Mrs. Lincoln, how was the play? – quotes from Scott London sentencing hearingRead More »

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:

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  14 months for Scott London in insider trading caseRead 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.

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Sentencing for Scott London still set for 11:00 a.m. todayRead More »