KPMG Faces FBI Probe into Insider Dealing Allegations
KPMG has stepped down as auditor for two US companies following allegations of insider trading by a senior American partner.
The ‘Big Four’ accountancy firm said that it had resigned as auditor of California-based companies Herbalife, the nutritional products producer and footwear maker Skechers, after revealing that a partner in its Los Angeles office faced charges of passing on ‘non-public client information’ on Herbalife to a third party, who subsequently traded on the stock. Herbalife has also been at the centre of a dispute between two major investors, Bill Ackman, the founder of Pershing Square Capital and Carl Icahn.
KPMG confirmed that it had also quit its oversight of Skechers on concerns that the alleged leak might have compromised the independence of its auditing.
It added that “the partner was immediately separated from the firm” following the allegations. “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 stated.
The Federal Bureau of Investigations (FBI) has launched an investigation in to the matter, which reports suggest will be headed by its Los Angeles office.
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