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. companies amid an FBI investigation into insider trading allegations involving a former senior partner.
The 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 alleged leaks of nonpublic information.
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 that KPMG partner Scott London had been lead auditor for Skechers and that he had resigned after the leaks. Weinberg said that London had admitted to sharing inside information.
Shares of Herbalife were down 3.9 percent at $36.91 and Skechers shares were up 2.3 percent at $22.00 late on Tuesday afternoon amid broadly bullish New York Stock Exchange trading.
A KPMG spokesman confirmed that London was the partner who had resigned.
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.
Herbalife said in a statement that KPMG's resignation had nothing to do with the company's accounting practices or the integrity of its management - issues called into question by the high-stakes drama between hedge fund titans Bill Ackman and Carl Icahn over the company.
KPMG said in a statement late on Monday that it had resigned as the outside auditor of two clients due to the actions of a senior partner, who was in charge of the audit practice in its Los Angeles business unit.
Monday's announcement did not identify the partner or the companies involved. It said the unidentified partner provided inside information about its clients to someone who had used that information in stock trading.
"The partner was immediately separated from the firm," KPMG said in its statement. "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 is the smallest of the Big Four global accounting and audit firms. It reported 2012 revenue of $23 billion, up 1.4 percent from the year before.
The other three firms are PricewaterhouseCoopers, Deloitte and Ernst & Young. All are U.S.-based and operate affiliate networks around the world.
The outgoing chairman of the U.S. Securities and Exchange Commission, Elisse Walter, declined to comment on KPMG's announcement when asked by Reuters on Tuesday.
Ackman and Icahn were not immediately available for comment.
Any controversy over KPMG's dealings could hurt the firm's reputation.
In 2005, KPMG narrowly avoided a criminal indictment by agreeing to pay $456 million in a deferred prosecution settlement with U.S. authorities over its sale of tax shelters. Three years earlier, smaller rival Arthur Andersen collapsed over its auditing work for energy company Enron Corp.
In addition, KPMG partners were the only ones so far to have been sued by the SEC in connection with the global financial crisis.
Bill Ackman, who has a short position in Herbalife, suffered a blow on Monday when the J.C. Penney Co Inc chief executive he handpicked, Ron Johnson, was ousted by the board.
(Additional reporting by Jonathan Stempel in New York; Ben Berkowitz in Boston; Sarah N. Lynch in Washington; Nanette Byrnes in Chapel Hill, N.C.; Writing by Kevin Drawbaugh in Washington, D.C.; Editing by Gerald E. McCormick and Matthew Lewis)
Source: http://news.yahoo.com/herbalife-auditor-kpmg-resign-amid-leak-nyt-145828841--sector.html
sacha baron cohen best picture nominees 2012 academy awards 2012 albert nobbs a star is born oscar nominees oscar nominations 2012
কোন মন্তব্য নেই:
একটি মন্তব্য পোস্ট করুন