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Stuart Pfeifer

Fired KPMG auditor can't explain 'lapse of judgment'

Fired KPMG auditor can't explain 'lapse of judgment'

Scott London, a Los Angeles partner in one of the nation's largest accounting firms, says it began four years ago.

By his account, a friend with money trouble was poking around for information on Herbalife Ltd. and Skechers USA Inc., two Los Angeles-area companies whose audits London personally oversaw. Soon, he says, he was passing inside tips on the companies that resulted in as much as $100,000 in profit for his buddy.

In return, he says, he collected "about $25,000" in cash, was treated to fancy dinners and received a Rolex watch as a gift.

On Tuesday, London and his company, KPMG, were caught up in an insider-trading scandal that rocked Wall...