Thu, Apr 11, 2013 - Page 15 News List

FBI probes insider trading as KPMG quits two audits

Reuters

In a blow to one of the world’s largest accounting firms, KPMG said it has resigned as auditor of two US corporations amid an FBI investigation into insider trading allegations involving leaked information and a former senior partner.

The two California-based companies — nutritional products group Herbalife Ltd and footwear maker Skechers USA Inc — said separately on Tuesday that KPMG had quit as their auditor in connection with the leaks.

The FBI’s Los Angeles office is investigating the matter, according to a source familiar with the situation.

Skechers chief financial officer David Weinberg said in an interview that Scott London had been the lead auditor for Skechers and had resigned after the leaks. Weinberg said that London had admitted to sharing inside information.

A KPMG spokesman confirmed that London was the partner who had resigned from the firm.

London was not immediately available for comment. The 50-year-old California native worked at KPMG for 29 years. A baseball lover, London became chairman of the LA Sports Council in 2011. He is also listed as a director last year on the board of the Los Angeles Chamber of Commerce.

Shares of Herbalife closed down 3.8 percent at US$36.95, while Skechers shares were up 1.9 percent at US$21.91 on Tuesday on New York Stock Exchange trading.

Herbalife said in a statement that KPMG’s resignation had nothing to do with the company’s accounting practices or the integrity of its management — issues called into question by the high-stakes drama between hedge fund titans Bill Ackman and Carl Icahn over the company.

KPMG is the smallest of the Big Four global accounting and audit firms. The other three firms are PricewaterhouseCoopers, Deloitte and Ernst & Young.

KPMG reported revenue last year of US$23 billion, up 1.4 percent from the year before.

This story has been viewed 1370 times.
TOP top