A former senior partner at KPMG has been charged with insider trading after it was alleged he exchanged stock tips for cash and jewellery including a Rolex watch.
US authorities have filed criminal and civil charges against Scott London, a former senior partner at the accountancy and audit firm, over alleged insider trading.
According to the complaint filed in a Los Angeles court, London told his golfing friend Bryan Shaw about a planned merger between KPMG's client RSC Holdings and United Rentals.
He also told Shaw, a jeweller, about a takeover of Pacific Capital Bancorp by Union Bank, according to the charges. Shaw made more than $1m by trading on the secret information, authorities said.
In return for the information, London allegedly received cash and jewellery. It is thought that the authorities were first alerted when Shaw's stockbroker noticed unusual share trading patterns.
KPMG said on Wednesday that as soon as the allegations came to light "the partner was immediately separated from the firm". It added: "This individual violated the firm's rigorous policies and protections, betrayed the trust of clients as well as colleagues, and acted with deliberate disregard for KPMG's long-standing culture of professionalism and integrity."
Shaw's lawyer read a statement from his client saying: "I expect that my actions will result in significant civil and criminal consequences, but I realise that this is the painful price I will pay for my transgressions."
If convicted, London faces up to five years in prison.
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