News Column

KPMG Quits 2 Audits as FBI Probe Commences

April 11, 2013

KPMG has resigned as auditor of two US corporations amid an FBI investigation into insider trading allegations involving leaked information and a former senior partner.

The two California-based companies - nutritional products group Herbalife and footwear maker Skechers USA - said separately KPMG had quit as auditor.

The FBI's Los Angeles office is investigating the matter, according to a source familiar with the situation.

Skechers chief financial officer David Weinberg said Scott London had been the lead auditor for Skechers and had resigned after the leaks, having admitted to sharing inside information.

A KPMG spokesman confirmed Mr London was the partner who had resigned from the firm.

Mr London was not immediately available for comment. The 50-year- old California native worked at KPMG for 29 years. A baseball lover, he became chairman of the LA Sports Council in 2011. He is also listed as a 2012 director on the board of the Los Angeles Chamber of Commerce.

KPMG said it had resigned as the outside auditor for two clients due to the actions of a senior partner, who was in charge of the audit practice in its Los Angeles business unit.

Monday's announcement did not identify the partner or the companies involved. It said the partner provided inside information about its clients that had been used in stock trading.

A statement said: "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."


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Source: (C) 2013 The Herald. via ProQuest Information and Learning Company; All Rights Reserved


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