Partner at KPMG linked to insider trading in US
Tuesday 09 April 2013
KPMG has resigned as auditor ofthe US health care group Herbalife after one of its senior partners became embroiled in an insider trading scandal.
The accountancy firm said the unidentified partner provided inside information about the company to an individual who used it to trade stock.
The partner in question had been its lead auditor on the account, meaning that KPMG's endorsement of Herbalife's 2010, 2011 and 2012 accounts has now been discarded.
"This individual violated the firm's rigorous policies and protections, betrayed the trust of clients as well as colleagues, and acted with deliberate disregard for KPMG's longstanding culture of professionalism," the firm added in a statement.
Herbalife said that KPMG's resignation had nothing to do with its own accounting or management practices.
KPMG is the smallest of the big four global accounting and audit firms. The other three are PricewaterhouseCoopers, Deloitte and Ernst & Young.
Herbalife, which sells nutrition, weight-loss and skin-care products, has been at the centre of a battle between the billionaire investors Bill Ackman, Carl Icahn and Daniel Loeb over the past few months.
Mr Ackman has described the company as "the best managed pyramid scheme in the history of the world", while the others have made huge bets that the company will flourish.
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