Yesterday, KPMG stated that it had terminated the employment of the partner in charge of its audit practice in Los Angeles after the firm learned that the partner provide "non-public client information to a third party, who then used that information in stock trades involving several West Coast companies." KPMG condemned the "rogue actions" of the partner, and stated that it would be resigning as auditor for two clients and withdrawing its auditor reports.

Today, more details on this alleged insider trading scheme began to emerge. DealBook reported today that the terminated KPMG partner's name is Scott I. London, a 29-year veteran of KPMG. The case reportedly involves

alleged tips about confidential data related to Herbalife, the seller of nutritional supplements, and Skechers USA, the footwear maker, according to these people. On Tuesday morning, both Herbalife and Skechers announced that KPMG had resigned as their auditor.

Both federal prosecutors and the L.A. office of the SEC are reportedly now investigating the matter. In October 2012, Thomas P. Flanagan, Deloitte's former Vice Chairman of Clients and Markets, was sentenced to 21 months in prison after he pleaded guilty to trading on inside information he received from client audits between 2006 and 2008.

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