Bryan Shaw, Securities Fraud, California 2023

LOS ANGELES, CALIFORNIA, May 17, 2023

Bryan Shaw, a 52-year-old owner of a San Fernando Valley jewelry store, has agreed to plead guilty to a federal conspiracy charge in connection with an insider stock trades scandal. Shaw, of Lake Sherwood, California, is accused of receiving insider information from a senior partner with KPMG LLP and using that confidential information to make illegal stock trades that generated well over $1 million in illicit profits.

According to the plea agreement, Shaw admitted that he conspired with former KPMG senior partner Scott London to violate federal securities laws by using insider information to make illegal stock transactions in publicly traded companies. Shaw agreed to disgorge approximately $1,271,787 in illegal stock trading profits.

London, 50, of Agoura Hills, was charged last month in a criminal complaint with one count of conspiracy to commit securities fraud. London is scheduled to be arraigned in the case in United States District Court on May 17.

“These two men were close friends who shared dinners, concerts, sporting events and secret information that brought profits to each of them,” said United States Attorney André Birotte Jr. “London provided, and Shaw was all too happy to use, proprietary information that should have remained confidential. These men broke ethical rules and criminal laws for the sole purpose of lining their pockets with illegal profits.”

The FBI is committed to investigating allegations of insider trading and will hold violators accountable to ensure the public playing field is even and fair. Shaw is expected to make his initial appearance later this week in United States District Court.

Shaw is charged with one count of conspiracy and faces a maximum penalty of five years in prison. In addition to the $1,271,787 in disgorgement, Shaw must also forfeit any other proceeds obtained as a result of the illegal stock trades.

The case against Shaw and London is a result of an investigation by the FBI’s Los Angeles Field Office. The documents filed in the case against Shaw, as well as the 24-page affidavit in support of the criminal complaint in London’s case, outline how London provided Shaw with confidential information about KPMG clients, and how Shaw used this information to make trades that generated the illegal proceeds.

London was a senior partner at KPMG who supervised hundreds of accounting professionals at the firm and personally handled audits for major KPMG clients, including Herbalife Ltd. and Skechers USA, Inc. As a result of his position, London had access to confidential information about KPMG’s clients before that information was disclosed to the public.

In February 2013, Shaw began to cooperate with the government’s investigation. London’s alleged criminal conduct continued until March, when he was recorded in telephone conversations passing highly sensitive and confidential information to Shaw regarding upcoming earnings announcements for KPMG clients Herbalife, Ltd. and Deckers Outdoor Corporation.

During the course of the scheme, London, in some instances, called Shaw two to three days before press releases were issued for KPMG clients and read confidential information from the draft releases to Shaw, according to court documents. London allegedly also disclosed to Shaw confidential information about impending mergers concerning KPMG clients before that information was made public. At times, London even discussed with Shaw how to structure Shaw’s purchases of the stock in certain companies in order to protect them from being discovered.

Shaw admits in his plea agreement that he gave London more than $60,000 in cash in exchange for confidential information about KPMG’s clients, typically meeting with him at a coffee shop in the San Fernando Valley.

MORE FEDERAL CRIME NEWS

White Collar Crime

Nedialko Mintchev Nedialkov, Money Laundering, Nevada 2004

Jan 15, 2004

White Collar Crime

Von Valkenburg, Identity Theft, Washington 2007

Jan 15, 2007

White Collar Crime

Diameter Akala, Unemployment Benefits Fraud, Maryland 2023

May 13, 2016

White Collar Crime

Tabaro Nshimiye, Wire Fraud, Massachusetts 2024

Jan 15, 2024