charged in KPMG insider trading case

2 charged in KPMG insider trading case<br /><br />Scott London, 50, who was fired by KPMG as the latest federal insider trading scandal escalated this week, was charged with conspiracy to commit criminal securities fraud for allegedly feeding illegal tips to close friend Bryan Shaw, 52, over a period of several years.Londons lawyer, Harland Braun, told a judge that London would plead guilty at a hearing set for May 17, according to Bloomberg News. Magistrate Judge Charles Eick ordered London to post bail of $150,000, Bloomberg says.Shaw allegedly made more than $1.27 million by illegally trading on the stocks ahead of earnings or merger announcements, the Securities and Exchange Commission charged in a separate civil lawsuit filed against the two men Thursday.London allegedly tipped friend Shaw with non public information about five KPMG clients starting in October 2010.The criminal complaint charges that from late 2010 until last month London gave Shaw financial information about Skechers and Deckers Outdoor and Herbalife, all KPMG clients. London, who personally handled audits for Herbalife and Skechers, sometimes called Shaw two to three days before the information became public and discussed how to structure stock purchases to prevent discovery, the criminal complaint charged.In return, Shaw allegedly gave London tens of thousands of dollars in cash, typically giving the money in bags of $100 bills during clandestine meetings on a side street near Shaws business, the complaint charged. Shaw also gave London a Rolex watch worth about $12,000, along with jewelry and tickets the two shared to concerts by Bruce Springsteen and other artists.In one recorded call, London mentioned rumors about Herbalife going private, and told Shaw if such an event occurred that is going to be where you make a ton of money, the criminal complaint charged.What we oughta do is, when I know that its gonna start happening, what you do is you start just buying in small blocks, right, so it doesnt draw attention and then, you know, then it doesnt look unusual at all, the complaint accused London of advising.At the direction of FBI agents, Shaw met with London on a street corner in Encino, Calif., and delivered a bag with $5,000 cash as payment for non public information about Herbalifes February 2012 earnings announcement, the complaint charged. At a later meeting at a Woodland Hills, Calif., parking lot, London allegedly accepted a second bag containing $5,000 in cash as payment for confidential information about Deckers February earnings announcement.FBI agents secretly took a surveillance photo of London accepting one of the payments.The SEC complaint said London and Shaw initially met at a country club years ago and became good friends who routinely golfed together. London gave Shaw the information to help him get through a difficult time economically as Shaws jewelry business struggled, the SEC complaint alleged.READ: The SEC complaint against London and ShawLondon had been a partner at KPMG for nearly 30 years. News of the scandal emerged Monday after KPMG announced it would resign as the auditor for Herbalife and footwear maker Skecher.The SEC and federal prosecutors also charged that London got confidential information about former KPMG clients RSC Holdings and Pacific Capital. Shaw generated nearly $192,000 in profit by buying RSC stock the day before a merger announcement. He made $365,000 buying shares of Pacific Capital ahead of a merger, the SEC complaint alleged.