Former KPMG LLP senior partner Scott London, who had provided tips to a friend about the accounting firm’s clients, was sentenced to 14 months in prison on an insider trading charge by a federal judge in Los Angeles on Thursday.
London, 51, pleaded guilty in July to securities fraud for having tipped Bryan Shaw, a jeweler and golfing partner, about at least 14 acquisitions or earnings announcements by KPMG clients, including Herbalife Ltd and Skechers USA Inc.
Prosecutors said Shaw made about $1.27 million of illegal profit by trading on the information, and paid London more than $60,000 in cash plus gifts such as a $12,000 Rolex watch and tickets to a Bruce Springsteen concert in return.
U.S. District Judge George Wu, who imposed the sentence, also ordered London to pay a $100,000 fine and serve three years of supervised release, said a spokesman for U.S. Attorney André Birotte in Los Angeles. London must surrender by July 18.
The prison sentence was shorter than the three-year term that prosecutors had sought. London had asked for probation.
“It seemed like a fair sentence,” London’s lawyer, Harland Braun, said in an interview. “He has given up an enormous amount, in terms of his career and the public disgrace. When he was confronted by the FBI, he protected KPMG and his clients by fully cooperating immediately.”
Before his April 2013 arrest, London worked for 29 years at KPMG and supervised more than 500 people as head of its audit practice in Los Angeles. London was ultimately fired.
“He is very remorseful,” Braun said. “It is inexplicable what he did, and given his income he didn’t do it for money. He just got on a slippery slope with someone who was his friend, and he doesn’t excuse it.”
Shaw pleaded guilty in May 2013 to a conspiracy charge, and is scheduled to be sentenced on May 19, court records show. Neither KPMG nor other employees were implicated in wrongdoing.
The case is U.S. v. London, U.S. District Court, Central District of California, No. 13-cr-00379.
(Reporting by Jonathan Stempel and Ronald Grover in New York; Editing by Mohammad Zargham)