FBI probes trading as KPMG quits Herbalife, Skechers audits

Tue Apr 9, 2013 7:10pm EDT
 
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By Martinne Geller and Emily Flitter

(Reuters) - In a blow to one of the world's largest accounting firms, KPMG said it resigned as auditor of two U.S. corporations amid an FBI investigation into insider trading allegations involving leaked information and a former senior partner.

The two California-based companies - nutritional products group Herbalife Ltd and footwear maker Skechers USA Inc - said separately on Tuesday that KPMG had quit as their auditor in connection with the leaks.

The FBI's Los Angeles office is investigating the matter, according to a source familiar with the situation.

Skechers Chief Financial Officer David Weinberg told Reuters in an interview that Scott London had been the lead auditor for Skechers and had resigned after the leaks. Weinberg said that London had admitted to sharing inside information.

A KPMG spokesman confirmed that London was the partner who had resigned from the firm.

London was not immediately available for comment. The 50-year-old California native worked at KPMG for 29 years. A baseball lover, London became chairman of the L.A. Sports Council in 2011. He is also listed as a 2012 director on the board of the Los Angeles Chamber of Commerce.

Shares of Herbalife closed down 3.8 percent at $36.95, while Skechers shares were up 1.9 percent at $21.91 on Tuesday on moderately bullish New York Stock Exchange trading.

ANALYST DOWNGRADES HERBALIFE   Continued...

 
Traders work at the post that trades Herbalife stock on the floor of the New York Stock Exchange in this January 10, 2013 file photograph. REUTERS/Brendan McDermid/Files