KPMG auditor ‘passed tips to golf partner’

A former senior audit partner at KPMG who quit after admitting to passing on inside information about corporate clients Herbalife and Skechers USA was identified by the golf partner he had been tipping, according to his lawyer.

The golf partner, identified last night by the Wall Street Journal as Bryan Shaw, led federal investigators to former KPMG partner Scott London after he was approached by FBI agents, said Harlan Braun, the lawyer representing London.

KPMG has resigned as auditor of the two companies.

Braun did not name the man who allegedly received inside information on the companies from London, but said he was co-operating with the FBI.

He said London had received money in exchange for his inside tips. “It’s a clearer case” in which both parties knew they were violating insider trading laws, he said. “This was a pretty contained investigation.”

In an interview with the Wall Street Journal on Tuesday, London said he was not initially aware that his friend was trading on the information.

London left KPMG last week after admitting to sharing non-public information about the companies which his golfing partner, who used it to trade stocks.

Braun said the recipient of the information first ran into trouble when the broker he was using to trade on his tips became suspicious and refused to accept further orders.

Later, when he was approached by agents with the Los Angeles division of the FBI, London’s friend agreed to co-operate, Braun said. The man then told the FBI that London was the person who had been giving him the non-public information.