Won't happen again.
Bryan Shaw, the jeweler who took tips on Herbalife (HLF.N), Skechers (SKX.N) and other companies from his one-time golfing buddy Scott London, agreed to pay around $1.3 million in restitution and will continue to cooperate with the government as part of a plea deal with federal prosecutors, according to the documents. Shaw is expected to appear in federal court later this week to formally enter the plea. His lawyer, Nathan Hochman, a partner at Bingham McCutchen in Los Angeles, did not respond to a request for comment. London, whose 29-year career at KPMG ended in his firing and arrest last month, had served as the head of the accounting firm's audit practice in Los Angeles. "These two men were close friends who shared dinners, concerts, sporting events and secret information that brought profits to each of them," André Birotte Jr., the U.S. attorney for the Central District of California, said. "London provided, and Shaw was all too happy to use, proprietary information that should have remained confidential."
According to information filed by the U.S. Attorney's Office, London gave Shaw insider tips and trading advice about five public companies over a two-year period. In return, Shaw gave London thousands of dollars in cash, a Rolex watch and tickets to a Bruce Springsteen concert, among other things. When federal investigators caught up with Shaw, who had traded on some of the tips, he agreed to cooperate with them. Shaw recorded phone conversations in which he and London discussed trading on non-public information from the companies whose audits London oversaw. As agents from the Federal Bureau of Investigation watched, Shaw met with London in a parking lot to hand him an envelope full of cash as payment for the tips.