Scott London, the former KPMG audit partner who pleaded guilt to insider trading, has been banned for life from working as an accountant with listed companies.
According to a statement from the US Securities and Exchange Commission (SEC), the former head of KPMG's Los Angeles office was guilty of "multiple auditor independence rule violations", including "accepting cash and other things of value as compensation for tips he provided to a friend concerning five audit clients."
In April, KPMG resigned from the audits of Sketchers and Herbalife, saying that its audit independence had been compromised as a result.
London was fired and subjected to an investigation by the FBI for providing non-public client information in exchange for money and expensive gifts, including a Rolex watch.
The third party, Bryan Shaw, a jewellery store owner, then used the information to trade stocks of several West Coast companies over a period of several years.
London, who was engagement partner on the firms’ audits, is now co-operating with the FBI and and SEC.
In a statement to the Wall Street Journal, he said he regretted leaking the information and stressed that none of his actions affected the way the Sketchers and Herbalife audits were conducted.
“KPMG had nothing to do with what I did,” he said. “These actions were by my choice and mine only.
London's guilty plea carries a maximum 20-year prison term. He awaits sentencing.