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‘You Can Still Lose Money Trading On Material Non-Public Information’ Is Biggest Takeaway From KPMG Scandal, Posits Lawyer Representing Guy Doing The Tipping

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Scott London's path from KPMG LLP partner to subject of insider-trading investigations began with a casual conversation in 2010 with "someone I'd known from the golf club, " he said in an interview. Mr. London said the discussions—which began after he had spent a quarter of a century at KPMG—concerned corporate audit clients Herbalife Ltd. and Skechers USA Inc. It wasn't until the second or third chat that he realized that his unidentified friend was trading on the information, he said...In late March, Mr. London said he was contacted by the Federal Bureau of Investigation, at which point he hired a lawyer, Harland W. Braun...Mr. Braun said his client hadn't reached a deal with prosecutors or the SEC to settle any allegations that may result from their investigations. Mr. Braun said the friend's brokerage had frozen his trading account, adding that some of these trades had lost money. "It just shows how dangerous casual tips can be," Mr. Braun said. [WSJ]