California Board of Accountancy’s Update #74, sent by email this morning, had the following news:
LONDON, SCOTT IAN
Agoura Hills, CA (CPA 46174)
Surrender of CPA license, via stipulated settlement.
Mr. London shall pay the CBA its costs of investigation and prosecution in the amount of $1,637.50 prior to issuance of a new or reinstated license.
Effective December 27, 2013
CAUSE FOR DISCIPLINE
Accusation No. AC-2014-10 contains the following allegations:
On or about July 1, 2013, Mr. London was convicted of one count of securities fraud through insider trading, in violation of Title 15, United States Code, Sections 78j(b), and 78ff and Title 17, Code of Federal Regulations, Section 240.10b-5 pursuant to a plea agreement.
The circumstances underlying the criminal conviction are that Mr. London, a senior partner at the accounting firm KPMG, LLP, knowingly and willfully engaged in a conspiracy to commit securities fraud through insider trading with his friend. Mr. London would provide material, non-public information (inside information) regarding certain publicly-traded KPMG clients to his friend in violation of the fiduciary and other duties of trust and confidence that Mr. London owed to KPMG and its clients, knowing his friend would make securities transactions based on that inside information. Mr. London received cash payments as compensation for providing the inside information regarding KPMG’s clients.
Mr. London’s actions that resulted in the conviction also constitute acts of unprofessional conduct involving dishonesty or fraud and breach of fiduciary responsibility.
Business and Professions Code, Division 1.5, Chapter 3, § 490; Division 3, Chapter 1, §§ 5100(a), (c) and (i). California Code of Regulations, Title 16, Division 1, § 99.
I requested permission from the California Board of Accountancy for permission to reprint the above information and was advised by a representative that since disciplinary actions are public documents, permission is not needed. Just wanted to disclose my request. The material is obviously written by the CBA and is used with their knowledge, even if permission isn’t needed.
Loss of license
That stipulation means Mr. London agreed to surrender his license with an effective date of 12/27/13. Not a pleasant holiday for him or his family. Especially since the sentencing date for the criminal case kept getting pushed back a few weeks at a time through the holidays.
Update #74 can be found here.
The disciplinary action can be found here.
Full disclosure: For anyone who didn’t know, the California Board of Accountancy is the regulatory agency with oversight authority of my CPA practice.
Next post: More consequences from insider trading. Will also outline timing of the disciplinary action.