Federal authorities in Los Angeles are investigating a former senior executive at KPMG on suspicion of leaking secret information to a stock trader, according to people with direct knowledge of the inquiry.
Scott London, the partner in charge of the audit practice for KPMG in Southern California, was fired by his employer because of the suspected passing of confidential data to an unnamed individual, a person briefed on the matter said.
The case involves alleged tips about confidential data related to Herbalife, the seller of nutritional supplement, and Skechers USA, the footwear maker, according to these people. On Tuesday morning, Herbalife and Skechers announced that KPMG had resigned as their auditor.
Both the U.S. attorney’s office in Los Angeles and the Securities and Exchange Commission’s outpost there are investigating the case, people briefed on the matter said.
Skechers added that, according to KPMG, the former partner in question — London — was cooperating with authorities.
London, 50, could not immediately be reached for comment. He worked at KPMG for 29 years, according to a profile on LinkedIn. A resident of Agoura Hills, Calif., London is chairman of the L.A. Sports Council and sits on the board of directors of the Los Angeles Area Chamber of Commerce.
The news of possible insider trading emerged in an unusual fashion late Monday, when KPMG announced on its website that it had fired a senior partner in its Los Angeles office because of the suspected passing of confidential information to an unnamed individual “who then used that information in stock trades involving several West Coast companies.”