LOS ANGELES (AP) — A former partner at the accounting firm KPMG agreed to plead guilty Tuesday to a securities fraud charge for providing insider information to a friend who plied him in return with cash bribes, a Rolex watch and other luxurious items.
Scott London, 50, agreed to plead guilty to one felony count of securities fraud that carries a maximum 20-year prison term. He's scheduled to appear in court Friday.
London gave privileged information to friend and jewelry store owner Bryan Shaw over a period of several years. Shaw then used the information to trade in advance of announcements for KPMG clients as Herbalife Ltd. and Skechers USA Inc. He is estimated to have reaped more than $1 million in illicit profits.
In exchange, Shaw gave London bags filled with cash, along with a $12,000 Rolex watch and jewelry for his wife, among other items, prosecutors said. The Securities and Exchange Commission, which filed civil charges in the case, estimates London received at least $50,000.
"Behavior like this is an affront to people who follow the law and compromises the public perception in the inherent fairness of the markets by creating an uneven playing field," said U.S. Attorney Andre Birotte Jr.
Shaw has pleaded guilty to one count of conspiracy and is scheduled to be sentenced in September. He faces a maximum of five years in prison.
London was a senior partner at KPMG who supervised more than 500 accounting professionals at the firm and personally handled audits for major clients.