What code violations have occurred in this case What is the

What code violations have occurred in this case?

What is the range of penalties that the PCAOB could have levied against London? By the California State Board of Accountancy?

What do you think is the appropriate penalty?

What penalties were assessed?

Page C33 London Has Fallen Scott London seemed to have it all. One of three sons of a Los Angeles certified public accountant, he followed his father into the accounting business. He graduated in 1984 from California State University-Northridge and soon landed a job at a firm that later became part of KPMG. From an outsider\'s perspective, London appeared to have an ideal personal life. He and his wife Michele had two children and lived in an expensive home at the end of a cul-de-sac in a Los Angeles suburb known as the gateway to the Santa Monica Mountains. Professionally, as the KPMG partner in charge of the firm\'s Pacific Southwest Audit practice, he had more than 50 partners and 500 employees reporting to him. After 29 years with the firm, he seemed to be set financially, making close to $900,000 per year in salary With all this going for him, London shocked his colleagues and friends when he pled guilty to passing confidential client information to his golf buddy Bryan Shaw who had then traded on the information to make more than $1.5 million in illegal gains. Although the information was initially passed \"innocently\" in casual conversation on the golf course, London began accepting gifts of cash and jewelry in exchange for the tips. Shaw was caught when his trading account began showing up linked to trades made just before releases of corporate information to the public, a tell-tale sign of insider trading. When confronted, he agreed to cooperate with authorities, including agreeing to wear a wire to gain evidence against London. The sting operation that nabbed London was the result of a joint investigation by the FBI SEC, and Department of Justice When first notified of the allegations, KPMG acted immediately and decisively, firing London, who the firm said \"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.\"Due to independence concerns, the firm resigned as auditor of Skechers and Herbalife, companies whose audits London oversaw. KPMG also announced that it would reassess its quality control standards, which include employee training, monitoring key employees\' personal investments, and a whistle-blowing hot line

Solution

1.In This case is

According To 1.700.001 Confidential Client Information Rule is

A member in public practice shall not disclose any confidential client information without the specific consent of the client.

1.700.060 Disclosure of Client Information to Third Parties

If the information is considered to be confidential client information, the member would be in violation of the “Confidential Client Information Rule” [1.700.001] if the member discloses or uses the information unless the member has the client’s specific consent, preferably in writing, for the disclosure or use of such information. The consent should specify the nature of the information that may be disclosed, the type of third party to whom it may be disclosed, and its intended use.

2.CAlifornia board pf accountancy can lieve following penalities on london

London could face 20 years in prison

And more than $600000 fines and Penalities

3, According To me it wasn\'t appropriate penality As london unwantedly shared the information during a golf game what was he his fault that he has accepted the gifts and he was very guilty for that.

4.Penality Assessed were that Scott london was impriosend for more than 14 months and a fine upto $100000