Consequences of insider trading

Is the possibility of jail the only bad thing in store for a CPA accused of insider trading?

No way. There are a lot of really bad consequences visible on the horizon.

Background in one sentence

Mr. Scott London has been indicted for insider trading with the allegation that he passed on information he obtained as an audit partner at the Big 4 firm of KPMG to a buddy at the country club who in turn allegedly made over a million dollars from stock market activity based on that inside information.

Mentioned this before in this post.

Consequences

I have accumulated a list of consequence that are soon to land on him because of these allegations.  I’m obviously making the big assumption that the reality is the same as what has been alleged.

The list of consequences is long and the impact huge. Consider:

  • Jail time
  • Criminal fines
  • Legal fees for criminal case
  • Civil fines
  • Criminal tax enforcement
  • Publicity
  • Loss of employment
  • Loss of reputation
  • Loss of professional license
  • Litigation from employer
  • Poster child for favorite cause
  • Stress on marriage
  • Impact on family
  • Fodder for armchair psychoanalysis
  • Limited future employability
  • Legal fees for civil litigation
  • Financial devastation

These are discussed in a series of posts: 1, 2, 3, 4, 5, 6, and conclusion.

The posts are also combined into one long page here, in case you don’t want to click through to all the individual posts.

Why this series?

My hope, perhaps just a silly dream, is that focusing on the horrible consequences that fall on the head of people who do bad things will deter a few people from doing bad things.

It’s too late for Mr. London, but not for others.

Full disclosure:

I worked for Peat, Marwick, Mitchell before the name change to KPMG. I had the utmost respect for all my colleagues when I worked there. Still have a lot of respect for the firm. I’ve had no involvement with PMM/KPMG since leaving the firm, other than working for a bank which had PMM as their auditor. Filter my comments as you wish.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: