FBI probes trading as KPMG quits Herbalife, Skechers audits

NEW YORK, Wed Apr 10, 2013 — 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.