The federal government has charged Scott London, a former partner at accounting powerhouse KPMG, of insider trading, in what might be one of the most stupidly brazen corporate crimes anyone has seen in quite some time. London, who oversaw the audits of several major corporations—including the closely watched Herbalife—provided non-public information to a golfing buddy, who turned around and made about $1 million in stock trades based on what he knew. As soon as the FBI came calling, the buddy—a jeweler named Bryan Shaw—sang like a canary, KPMG gave London the boot, and everyone on Wall Street was asking one question: What the heck was this guy thinking?
Even before formal charges were drawn up today, London was forced to admit that the Justice Department basically has him dead to rights. How could he not? His partner in the scheme has given up everything, and there's simply no way for a person in London's position to argue that he didn't know that what he was doing was very wrong. To commit the crime he's accused of, London had to violate the most basic principles of a profession he's spent more than half his life in.
London is an accountant and professional auditor for one his industry's big four firms. His entire job revolved around handling "material non-public information"—the kind of the info that people go to jail for revealing. There's simply no way he could pretend that he didn't know what he was doing was illegal. He also should have known that if suspicion was around, it would almost certainly lead back to him.