(Bloomberg) A former senior KPMG LLP partner, Scott London, pleaded guilty to leaking confidential information about the audit firm’s clients to a friend who made more than $1 million trading on the inside information.
London, 50, admitted to one count of securities fraud at a hearing today in federal court in Los Angeles. He faces as long as 20 years in prison at his sentencing scheduled for Oct. 21 before U.S. District Judge George Wu.
“It’s almost an open plea,” London’s lawyer, Harland Brown, told Wu at the hearing, indicating that there was no agreement on what the sentence the government will recommend to the judge.
As part of his plea agreement, London, the former head of KPMG’s audit business in the Southwest U.S., admitted he leaked information to a friend about at least 14 separate earning announcements or acquisitions by KPMG clients before they were made public.
The friend, Bryan Shaw, pleaded guilty on May 20 to one count of conspiracy. Shaw paid London with bundles of cash in a side street near his jewelry store in the Los Angeles suburb of Encino and also gave him a $12,000 Rolex watch.
Shaw began cooperating with prosecutors in February and secretly recorded conversations with London. Shaw, who made about $1.3 million from the illegal trades, faces as long as five years in prison.
The case is U.S. v. London, 13-mj-01058, U.S. District Court, Central District of California (Los Angeles.)