Yesterday, KPMG said it fired one of its senior partners for
allegedly leaking non-public information in Herbalife and Skechers to a third
party who then traded those stocks.
BI writes that the now-former KPMG senior partner has been identified as
Scott London. He was in charge of the audit practice for KPMG in Southern
California.
London essentially threw away his 29-year accounting career. And for what? According to the LA Times, he got about
$25,000 in cash, some fancy dinners and a Rolex watch in exchange for the tips....
Although Scott London’s take from the insider trading is significant, the harm to society from that his exploitation of that conflict of interest pales in comparison to the damage from the cozy institutional relationships between CPA firms and their clients (as well as between rating agencies and firms putting up the securities to be rated). The institutional conflict of interest in the buyer-pays model multiplies the corruption from that which occurs in a personal conflict of interest. For more on these two type, and this argument, please click on my essay: http://www.thewordenreport.blogspot.com/2013/04/public-accountants-betraying-clients.html at the Worden Report.
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