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Friend of ex-KPMG auditor pleads guilty in insider case

Mon May 6, 2013 7:52pm EDT

NEW YORK (Reuters) – The California jeweler who gave a former KPMG auditor cash, an costly watch and unison tickets in sell for inside information about open companies concluded on Monday to beg guilty to one count of swindling to dedicate bonds fraud, according to justice papers.

Bryan Shaw, a jeweler who took tips on Herbalife (HLF.N), Skechers (SKX.N) and other companies from his one-time golfing friend Scott London, concluded to compensate around $1.3 million in compensation and will continue to concur with a supervision as partial of a defence understanding with sovereign prosecutors, according to a documents.

Shaw is approaching to seem in sovereign justice after this week to rigourously enter a plea. His lawyer, Nathan Hochman, a partner during Bingham McCutchen in Los Angeles, did not respond to a ask for comment.

London, whose 29-year career during KPMG finished in his banishment and detain final month, had served as a conduct of a accounting firm’s review use in Los Angeles.

“These dual group were tighten friends who common dinners, concerts, sporting events and tip information that brought increase to any of them,” AndrĂ© Birotte Jr., a U.S. profession for a Central District of California, said.

“London provided, and Shaw was all too happy to use, exclusive information that should have remained confidential.”

According to information filed by a U.S. Attorney’s Office, London gave Shaw insider tips and trade recommendation about 5 open companies over a two-year period. In return, Shaw gave London thousands of dollars in cash, a Rolex watch and tickets to a Bruce Springsteen concert, among other things.

When sovereign investigators held adult with Shaw, who had traded on some of a tips, he concluded to concur with them.

Shaw available phone conversations in that he and London discussed trade on non-public information from a companies whose audits London oversaw. As agents from a Federal Bureau of Investigation watched, Shaw met with London in a parking lot to palm him an pouch full of money as remuneration for a tips.

Harland Braun, London’s lawyer, did not respond to a ask for comment.

In sell for auxiliary with a review and pleading guilty, Shaw competence get a lighter punishment. Under his defence agreement, a supervision pronounced that as prolonged as prosecutors are confident with Shaw’s cooperation, they will suggest a two-level rebate in a offense turn that dictates sentencing guidelines.

A orator for a U.S. Attorney’s Office pronounced a limit judgment for a swindling count was 5 years. He declined to assume on how most of a judgment rebate Shaw could get.

In further to Skechers and Herbalife, London is indicted of leaking information about Deckers Outdoor Corp. (DECK.O) as good as skeleton for mergers between Pacific Capital Bancorp and Union Bank and RSC Holdings and United Rentals (URI.N).

When a leaks became public, KPMG quiescent as a auditor for Skechers and Herbalife.

A orator for KPMG declined to comment.

London’s grave prosecution is set for May 17. Braun has pronounced London will beg guilty.

The box is United States v. Bryan Shaw, U.S. District Court, Central District of California.

(Reporting by Emily Flitter; Editing by Leslie Adler)

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