Trader sorry for profiting from insider dealing tips
Share buyer who received information from KPMG says actions were 'incredibly stupid'
Bryan Shaw, a trader who said he received insider tips from fired KPMG partner Scott London, issued an apology, saying he has been co-operating with the US Department of Justice and the Securities and Exchange Commission.
"During 2010 through 2012, I received non-public information from Scott London about a number of companies and then profited substantially from stock trades based upon that information," Shaw said in a statement provided by Nathan Hochman, a lawyer at Bingham McCutchen.
"I cannot begin to apologise for my incredibly stupid actions."
London headed KPMG's audit practice in Los Angeles.
The firm said in an April 8 statement he was fired after KPMG learned he had provided inside information to someone who used it to trade shares of several West Coast companies. London was not identified by name in the statement.
Herbalife and Skechers USA said in statements on Tuesday that KPMG was withdrawing as their auditor.
London, in an e-mailed statement on Tuesday, said he leaked information by phone over a period of years to a person who traded on those tips.
London, who did not return messages seeking comment, said he was trying to help a person whose business was struggling.
Shaw is listed in online business directories as a partner with Encino, California-based Shaw Diamond, a wholesale jeweller and diamond broker founded in 1957.
"Over the past several months, I have fully co-operated with the Federal Bureau of Investigation, the SEC, and the US Department of Justice in their ongoing investigation of this matter," Shaw said in his statement.
"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."
London was the lead auditor for Skechers, according to David Weinberg, the shoemaker's chief financial officer.
Senior KPMG executives visited Skechers on April 8 and told Weinberg about the misconduct, he said.
They said no questions were raised about the company's financial reports and that they believed London was the only auditor involved, Weinberg said.