Wednesday, April 10, 2013

CSUN Grad At Center of KPMG Insider Trading Scandal

According to the Wall Street Journal, former KPMG audit partner, Scott London, received "on a couple of occasions" cash of $1,000-$2,000, some meals, and a discount on a watch from a unnamed golfing buddy. For this relatively modest consideration, Mr. London shared confidential and proprietary information of his audit clients, Herbalife and Sketchers USA, Inc. that was used by said golfing buddy to make some stock trades. Apparently a lot of stock trades. In so doing, London breached his fiduciary duties as the company auditor, violated virtually every material canon of professional ethics and committed criminal violations of the Securities Act, including breaches of insider trading laws. I suspect there is a lot more to the story, including, I suspect, a lot more in the way of additional payments or other consideration to London. It pains me every time I read of these major breakdowns of trust. The fact that he is an alumnus of CSUN's otherwise very excellent accounting program (and where I also teach) makes it all the more disappointing.


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