KPMG Fires L.A. Partner Over Alleged Insider-Trading Tips

By Frank Byrt

According to an April 8 statement made by KPMG LLP, the partner in charge of the firm's audit practice in Los Angeles was fired immediately after KPMG learned late last week of the partner's involvement in providing nonpublic client information to a third party and then using the information in stock trades involving several West Coast companies. 
 
The Big Four accounting firm described the partner's actions as "rogue" and stated, "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 long-standing culture of professionalism and integrity." 
 
KPMG also said that as a result of the situation, the firm is resigning from providing services to two clients and withdrawing its auditor reports on those clients' financial statements "after concluding today that the firm's independence has been impacted as a result of this individual's behavior."
 
"We have no reason to believe that the financial statements of these companies have been materially misstated," KPMG said.  
 
KPMG did not disclose the name of the third party or the companies involved.
 

You may like these other stories...

PwC must face $1 billion lawsuit over MF Global adviceA federal judge on Wednesday ordered PricewaterhouseCoopers (PwC) to face a $1 billion lawsuit claiming that its bad accounting advice was a substantial cause of the...
Anti Burger Kings: Seven US companies shrinking tax the old-fashioned wayBurger King’s decision to combine with Canadian donut shop Tim Hortons is renewing controversy over the lengths some US companies will go to...
Read more from Larry Perry here and in the Today's World of Audits archive.Since the AICPA's Financial Reporting Framework for Small- to Medium-sized Entities (FRF for SMEs) and some other financial reporting...

Already a member? log in here.

Upcoming CPE Webinars

Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.
Sep 10
Transfer your knowledge and experience to prepare your team for the challenges and opportunities of an accounting career.
Sep 11
This webcast will include discussions of commonly-applicable Clarified Auditing Standards for audits of non-public, non-governmental entities.
Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.