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As an auditor, you may have access to the internal information of your clients. Discuss what rule of conduct was violated by Scott London in

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As an auditor, you may have access to the internal information of your clients. Discuss what rule of conduct was violated by Scott London in this case. Big 4 Partner Convicted of Insider Trading for Disclosing Confidential Information Auditors frequently receive access to confidential client information, such as e information before the earnings announcement or information about planned mergere acquisitions. The AICPA Code of Professional Conduct prohibits members in public practice disclosing any confidential information without the consent of the client. Trading in pub traded companies on such inside information before it becomes public is also often a viols. ion such as earnings anned mergers and ic practice from ading in publicly ling doing .. used to da dan Inncm rain from doing som brony Minicron). Securities by a Dorang per refrain NET ading in company ory oftence of dealing of federal securities laws on insider trading. As a senior partner in the Los Angeles office of KPMG, Scott London had access to client information such as company earnings reports and planned acquisitions. Although he did not personally trade using this information, he passed the information on to Bryan Shaw, a friend who was in the jew- elry business. Over the course of several years, Shaw used the tips to make trades that resulted in profits of over $1 million. In exchange for the information, Shaw would arrange to meet London on a street near his business and give him bags containing $100 bills wrapped in $10,000 bundles. In court documents, Shaw also stated he gave London a $12,000 Rolex watch, jewelry, and concert tickets. Insider tradin che statutory on Tractor in a company's Secu on who through some Person egion with the co ion of infort available London's defense team argued that London began providing the tips because he wanted to help Mr. Shaw, whose jewelry business was struggling, and that he went down a "slippery slope." Although the judge noted that the $70,000 that London received was a "drop in the bucket compared to his annual salary of over $900,000, he also noted that by the 14th time London engaged in this activity, "it wasn't inadvertent." London was sentenced to 14 months in prison and fined $100,000. Although KPMG was unaware of London's actions, they were forced to resign from clients Herbalife and Skechers because London was the lead partner on these aud engagements

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