KPMG Partner Strikes Plea Deal In Herbalife Insider Case

May 29 2013 | 9:48am ET

The former KPMG partner whose sale of tips about Herbalife added uncertainty to the battle between two hedge fund managers over the nutritional supplements company will plead guilty to insider-trading.

Scott London reached a plea agreement with federal prosecutors in Los Angeles. He will plead guilty to securities fraud, and faces up to 20 years in prison and up to $5 million in fines.

London's deal comes a week after the beneficiary of his tips, jeweler Bryan Shaw, entered his own guilty plea. There was little suspense about it: London admitted wrongdoing in April, when he was arrested. He is set to appear in court on Friday, although the U.S. Attorney's Office in L.A. said that would likely be delayed.

London allegedly received tens of thousands of dollars from Shaw for confidential information about several companies audited by KPMG, including Herbalife, the subject of a high-profile battle between hedge fund managers William Ackman and Carl Icahn. His arrest led Herbalife, which Ackman has called a pyramid scheme, to resign as the company's auditor; it was replaced by PricewaterhouseCoopers last week.

As part of the plea deal, London will admit to passing Shaw inside information about 14 earnings or acquisition announcements by KPMG clients.

Shaw, London's former golfing partner, has been cooperating with authorities since earlier this year, participating in a sting operation and recording conversations with London.


In Depth

Hedge Fund Veteran Peter Borish Talks Trading

Dec 17 2014 | 9:32am ET

Peter Borish says 2014 was “tricky” from a trading perspective. “The best...

Lifestyle

Cohen Donates $1.5M To GOP Governors Association

Dec 10 2014 | 7:13am ET

The Republican Governors Association raised close to $25 million from October 1...

Guest Contributor

Q&A With Daniel Gallancy: Institutional Interest In Bitcoin Is Growing Steadily

Dec 12 2014 | 7:54am ET

Daniel Gallancy is founder and CEO of SolidX, a provider of total return swaps for...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.