Former KPMG partner Scott London was arraigned today according to several news reports. He is free on $150,000 bail.
His attorney suggested Mr. London will plead guilty at the May 17 hearing.
- Wall Street Journal – Secret Recordings, Cash in Insider Sting – info on court hearing is in the 7th paragraph
- Los Angeles Times – Former KPMG auditor Scott London appears in court – good picture of Mr London and his attorney.
- Bloomberg – Ex-KPMG Partner London Will Plead Guilty, Lawyer Says – best of the three articles
An idea on why there’s the admission during first interview and likely fast guilty plea
Struck me as odd that he admitted to sharing inside information for profit in his first interview with the FBI, SEC and USAG. I’ve seen the same comment elsewhere. Walter Pavlo discussed that at Forbes this morning, before the indictment appeared: Former KPMG Partner Scott London’s Legal Strategy: Admit Guilt Before Charges.
Also seems odd to me as a businessman that immediately after arraignment his attorney said he plans to plead guilty. Seems it would be sort of hard to cut a deal after that.
Here are a few comments from the Bloomberg article, by Edvard Pettersson:
Harland Braun, London’s lawyer, said after a court appearance that he expects his client to plead guilty at a hearing set for May 17.
No argument. No plea deal. Already saying in public his client will plead guilty.
Jail time? His attorney expects none:
If convicted, London faces a prison term of as long as five years, prosecutors said. Braun said he hoped London could avoid jail without saying what sentence he would be seeking.
How could that be? The Feds have been making a major push for years to get hard time for insider trading.
Does this comment give you a hint as to the argument that might be made at sentencing for no jail time?
London’s honesty after the scheme was discovered avoided a possible investigation of hundreds of audits done at KPMG and even possibly a stock market crash, Braun said. London “never dreamed” Shaw made as much as he did from the information he gave him, Braun said.
Hmm. Maybe the fast admission, full cooperation, and no-fuss guilty plea will be combined with the argument that by doing so, the ex-partner prevented the catastrophic damage of investigating hundreds of audits and a shock to the entire stock market.
In return for avoiding a systemic shock, maybe he should be able to walk.
Does that look like a possibility to anyone else? Am I reaching?
Related articles in reverse chronological order:
- KPMG partner arraigned – might plead guilty – hint on how to avoid jailtime?
- SEC files complaint against former KPMG partner
- KPMG partner indicted for insider trading. Indictment shows fiasco is far worse than shown in initial reports
- Initial highlights of insider trading by KPMG partner
- Live example of the ‘Wall Street Journal’ test