Federal prosecutors are expected to ask a Los Angeles judge today to sentence a former KPMG accounting partner to three years in prison for passing insider tips to a friend.
Scott London of Agoura Hills deserves the sentence because of "the corrupt nature" of his crime and for breaching the trust that his firm had placed in him, according to a sentencing memo.
The prison term is also necessary to send "a message to others engaged in criminal insider trading that if they are caught, they will go to prison," the court filing said.
Harland Braun, London's attorney, has requested that U.S. District Judge George H. Wu sentence his client to probation, with no jail time.
Although federal sentencing guidelines call for London to get between 46 and 57 months in prison, prosecutors said a lesser sentence is merited because London pleaded guilty and previously led "an exemplary life."
The government also recommends that London be fined $100,000 and serve three years under supervised release after his release from prison.
London pleaded guilty to one count of securities fraud last July, admitting he accepted bribes in exchange for confidential information about Southland-based companies Herbalife and Skechers USA.
In a separate case brought by the U.S. Securities and Exchange Commission, London has been barred from practicing as an accountant for any company regulated by the SEC.
London admitted in his plea agreement with federal prosecutors to providing confidential information about KPMG clients to Bryan Shaw, a close friend, over a period of several years.
Shaw, of Lake Sherwood, used the information to make more than a dozen highly profitable securities trades that he said brought him nearly $1.2 million in illegal proceeds.
London was a senior auditing partner at KPMG who supervised more than 500 accounting professionals at the firm and personally handled audits for major KPMG clients, including Herbalife and Skechers.
As a result of his position, London had access to confidential information about KPMG's clients before that information was disclosed to the public.
In the plea agreement, London admitted that he disclosed inside information to Shaw regarding at least 14 separate earnings announcements or acquisitions for KPMG clients.
Shaw -- who also pleaded guilty and is awaiting sentencing -- paid London with bundles of cash and gave him a $12,000 Rolex watch.
--City News Service