According to the SEC, London committed “multiple auditor independence violations” by accepting money and other forms of compensation for tipping a friend to confidential information about five KPMG audit clients.
London neither admitted nor denied wrongdoing in consenting to the SEC practice bar and to cease and desist from future violations. He faces up to 20 years in prison on the criminal charges .
In a release, Michele Wein Layne, director of the SEC's Los Angeles Regional Office, said, “Auditor independence goes to the heart of investor protection, as it impacts [an] investor's ability to trust the information disclosed in issuers' financial statements. London's illegal activity caused a cascade of negative consequences because he compromised not only his impartiality, but KPMG's as well.”
London's alleged tippee, jewelry-store owner Bryan Shaw, also pleaded guilty to charges stemming from his alleged role in the controversy. Both London and Shaw, who cooperated with the government, previously settled related SEC civil allegations.
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