Scott London: 'These leaks started in an effort to help out someone' [Telegraph via WSJ]
"Let me first say that I regret my actions in leaking non-public data to a third party regarding the clients I served for KPMG. Most importantly, and I cannot emphasize this enough, is that KPMG had nothing to do with what I did. The Firm bears no responsibility in this matter. These actions were by my choice and mine only. These leaks started a few years back in an effort to help out someone whose business was struggling. From time to time over the last couple of years, this third party would ask me how these clients were doing. On a few occasions over the past few years, this individual would ask if he should buy or sell a stock and I gave him my thoughts indicating whether the stock was a good buy or not. Never once did I pass any documents to him, but rather we spoke on the phone and the information I provided was in the form of a suggestion. He traded on the information, but to this day I am not aware of how much he profited from the information. Regardless, what I have done was wrong and against everything that had believed in. I spent nearly 30 years at KPMG and I dedicated my entire life to that Firm. This is the main reason why this is so difficult for me to go through. Knowing that I have caused harm and embarrassment to those that I respected and admired in the Firm has caused me tremdous [sic] grief that I am sure I will never overcome."
Another "Rogue" Audit Partner; Another "Duped" Audit Firm [Forbes]
But surely Scott London, KPMG’s “rogue”, had access to confidential information about more clients of the firm than just the ones he was directly responsible for. He was the partner in charge of the audit practice for a huge market, Los Angeles. He has the right, and the responsibility, to know about every interesting or problematic thing going on at the audit clients in his practice group. He may be a “concurring” or quality review partner on more companies’ audits and can “drop by” audit committee and other client meetings on a relationship-building basis. The exposure to KPMG and to the clients of this practice unit, and perhaps others, may be larger than what’s been admitted by the firm so far.
Was KPMG audit partner truly a ‘rogue’? [MW]
[I]n the corporate world there is a written code and an unspoken one. Junior employees follow the lead of senior ones. In this case, the “rogue” employee was the head of the audit practice in Los Angeles.
Scott London's path from KPMG LLP partner to subject of insider-trading investigations began with a casual conversation in 2010 with "someone I'd known from the golf club, " he said in an interview. Mr. London said the discussions—which began after he had spent a quarter of a century at KPMG—concerned corporate audit clients Herbalife Ltd. and Skechers USA Inc. It wasn't until the second or third chat that he realized that his unidentified friend was trading on the information, he said. "Once he told me he had traded, that's when my heart sank," Mr. London said in an interview with The Wall Street Journal Tuesday. "We had discussions this wasn't right—I knew it was wrong—but it just happened." Mr. London said he continued talking to this person, usually giving him "no real significant information."
Proposed rule would have forced KPMG to name auditor sooner [Reuters]
The name of Scott London, a KPMG veteran, emerged late on Tuesday, but would likely have been known sooner if the panel that regulates the audit industry had adopted a proposed rule to require disclosure of audit engagement partners. The Public Company Accounting Oversight Board, aiming to shine more light on public company audits, proposed the rule in October 2011, but has not enacted it. "We don't know how many other audits of public companies this person did," said Lynn Turner, former chief accountant for the U.S. Securities and Exchange Commission. "It is a shame the PCAOB has elected not to move forward with this significant proposal," he said.
Is that everyone?
And your most engaged might be your worst.
A man in China's southeastern Guangdong province admitted himself to a local hospital after he reportedly got a live eel stuck inside him. According to British tabloid The Sun, the man inserted the 20-inch-long Asian swamp eel into his anus after seeing it done in a porn movie, and he had to endure all-night surgery to have it extracted.