A former senior partner with the accounting giant KPMG is facing up to 20 years in prison after pleading guilty to insider trading.
Scott London, 50, once supervised more than 500 accounting staff at the firm, and oversaw audits of Herbalife and Skechers,
London's plea comes a few days after his one-time golfing friend Bryan Shaw pleaded guilty to one count of conspiracy to commit securities fraud.
Shaw allegedly gave London cash, an expensive watch and other gifts in exchange for tips on Herbalife, Skechers and other companies that helped him generate more than $1m (£600,000) in illegal profits, prosecutors in Los Angeles say. The FBI investigated his links to London and bugged telephones to uncover the scam.
Shaw sometimes gave London bags filled with cash at meetings on street corners and in parking lots, according to the prosecution.
In his plea agreement, London admitted he gave Shaw inside information regarding at least 14 separate earnings announcements or acquisitions by KPMG clients.
In addition to a maximum jail term of 20 years, he faces a fine of up to $5m or twice the gross gain or gross loss resulting from his offence, according to the plea agreement. Shaw agreed to pay around $1.3m in restitution and will continue to cooperate with the government's investigation as part of his plea.
London is due to appear in US federal court tomorrow.Reuse content