KPMG Fires L.A. Partner Over Alleged Insider-Trading Tips
by Terri Eyden on
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.