A former senior partner at accounting firm
London's stock-trading friend, Encino jeweler Bryan Shaw, pleaded guilty to a conspiracy charge last week.
Both men have acknowledged that London gave Shaw sneak previews of company earnings reports and told him about acquisitions involving KPMG clients before they were made public, and Shaw used the information to make trades.
The insider trading charge carries a potential sentence of 20 years in federal prison, but London probably would receive significantly less time because he has no prior criminal record.
Shaw has admitted giving London tens of thousands of dollars in cash in exchange for the inside information about KPMG's clients.
According to court documents, Shaw also said that he typically arranged to meet London on a side street near Shaw's business so that he could give London bags containing $100 bills wrapped in $10,000 bundles.
Shaw also said he gave London a $12,000 Rolex Cosmograph Daytona watch, as well as jewelry and concert tickets, in exchange for the confidential information.
"Over the course of several years, Mr. London secretly fed confidential, insider information to a man he knew would use that information to make trades," U.S. Atty. Andre Birotte Jr. said.
"Behavior like this is an affront to people who follow the law and compromises the public perception in the inherent fairness of the markets by creating an uneven playing field," Birotte said.
London's attorney, Harland Braun, could not be reached for comment.
KPMG resigned as auditor for two of the companies involved, nutritional products maker