Arraignment postponed for ex-KPMG auditor in insider-trading case
The arraignment for Scott London, the former KPMG auditor accused of participating in an insider trading scheme that netted over $1 million, was postponed Monday to an unknown date.
It was pushed back because federal prosecutors expect to move the matter before a different judge -- U.S. District Court Judge George H. Wu, who is overseeing the case for Bryan Shaw, the other defendant involved in the alleged crime.
The U.S. Department of Justice charged London with one count of conspiracy to commit securities fraud through insider trading.
Moments after the Monday proceeding London, 50, of Agoura Hills said he plans to plead guilty.
“I regret everything I did and I take full accountability for it,” London said. “I will regret it to the day I die.”
Full coverage: KPMG auditor accused of inside trading
London said he wants to put the matter behind him as soon as possible and get back to work so he can put two of his children through college and support his family.
“I’ll wait tables, I’ll do whatever it takes,” London said, wearing a dark suit and red tie. “I have lost much, more so than the other individual involved here.”
Shaw, a San Fernando Valley jeweler, pleaded guilty in May to a conspiracy charge and agreed to turn over the $1.27 million in stock-trading gains made from London’s tips.
London would call Shaw two or three days before press releases of KPMG clients were sent out and read him non-public information. He also tipped him off to mergers and helped Shaw strategize how to conceal his trading.
In return for the gains, Shaw rewarded London with about $50,000 in cash, a $10,000 Rolex watch and jewelry valued at less than $10,000, London said. He has since given most of the money and items back.
Their attempts to hide their alleged misdeeds didn’t work and eventually federal investigators caught on.
Shaw met London at a San Fernando Valley Starbucks for what appeared to be a casual get-together. Unbeknownst to London his longtime friend was setting him up and handed him an envelope with $5,000 in cash, a payoff for the information he provided.
The FBI was nearby photographing the exchange. Days later federal agents confronted London at his home and advised him to hire a lawyer.
London believed Shaw had profited by about $200,000 from the insider trading and “just about threw up” when he heard it was over $1 million.
While Shaw faces as many as five years in prison and a possible fine, prosecutors said they would recommend a reduced sentence if Shaw provides “substantial assistance” during their investigation.
The amount of jail time London faces is up to the discretion of the judge, said his lawyer, Harland W. Braun. He’s hoping the judge will take into consideration how much London lost in terms of his career and reputation. As well as how quickly he admitted guilt.
“He wanted to minimize the damage, could you imagine if there had been a 60-day investigation?” Braun said. “He’s lost so much in terms of his life.”
Braun is also expected to submit paperwork to modify London’s condition of release so that he can travel within the U.S. and visit college campuses with his son.
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