Jewelry Store Owner Pleads Guilty To Insider Trading
LOS ANGELES (CBSLA.com) — An Encino jewelry store owner plead guilty in court Monday to a federal charge of using insider information from a former auditor to make over $1 million from illegal stock trades.
Bryan Shaw, 52, of Lake Sherwood, appeared at the U.S. District Courthouse in downtown Los Angeles for a change-of-plea hearing after agreeing to a deal with federal prosecutors on May 6 to plead guilty to the felony charge.
KNX 1070′s Pete Demetriou reports as part of a plea agreement (PDF), Shaw also agreed to disgorge over $1.2 million in profits from illegal stock trading.
Prosecutors say Shaw conspired with former KPMG senior partner Scott London to commit securities fraud by using insider information to make illegal stock transactions in Herbalife, Skechers USA and other publicly traded companies.
London, 50, of Agoura Hills, was charged last month in a criminal complaint with one count of conspiracy to commit securities fraud. He is scheduled for arraignment on May 30.
Shaw began to cooperate with investigators in February, when London was recorded in telephone conversations allegedly passing highly sensitive and confidential information to Shaw regarding upcoming earnings announcements for KPMG clients Herbalife, Ltd. and Deckers Outdoor Corporation, according to the U.S. Attorney’s Office.
Prosecutors say in addition to bags of cash and a Rolex watch valued at $12,000, Shaw gave London several pieces of expensive jewelry for his wife and routinely covered the costs of dinners and concerts the two men shared along with their families.
“We hope that this sends a message that the market should be equal, there should be a level playing field, that folks who have the privilege to have access to inside information can’t benefit from that,” said Asst. U.S. Attorney Jim Bowman.
The federal charge of conspiracy to commit securities fraud carries a statutory maximum penalty of five years in prison, and a fine of $250,000 or twice the gross gain or loss from the offense.
Shaw is scheduled for sentencing on Sept. 16.