Encino Jeweler Get 5 Months for Insider Trading

An Encino jewelry store owner was sentenced today to five months in federal prison for using insider information about Southland-based companies passed to him by a former KPMG accounting partner to make securities trades that brought him nearly $1.2 million in illegal proceeds.

Bryan Shaw, 52, of Lake Sherwood, was also ordered to serve three years of supervised release after he leaves prison.

In a parallel action, the U.S. Securities and Exchange Commission ordered Shaw to pay a civil penalty of $635,000, defense attorney Nathan J. Hochman told the court.

Shaw admitted that beginning in October 2010, he gave golfing buddy Scott London of Agoura Hills tens of thousands of dollars in cash in exchange for inside information about KPMG's clients, including Herbalife and Skechers USA.

Shaw also arranged to meet London on a side street near Shaw's jewelry store so that he could give the then-KPMG senior auditing partner bags containing $100 bills wrapped in $10,000 bundles, according to his plea agreement.

He also gave London a $12,000 Rolex Daytona Cosmograph watch and other pieces of jewelry and concert tickets, in exchange for the confidential information.

In a tearful apology to the court, Shaw assured U.S. District Judge George Wu that "you will never, ever see me again."

Arguing for a six-month sentence, Assistant U.S. Attorney James Bowman said such a low prison term for an insider trading offense was "very rare" but appropriate due to Shaw's "exceptional cooperation" with investigators.

On two occasions, Shaw met with London at the direction of the FBI and gave him cash as supposed payment for confidential information about KPMG clients.

In the first instance, London met with Shaw on a street corner in Encino and accepted a bag with $5,000 in cash as payment for tips about Herbalife's earnings announcement in February 2013.

London later met with Shaw in a parking lot in Woodland Hills and accepted another bag with $5,000 in cash, which was supposedly London's share of the illegal profits from trades based on confidential information about Decker's February 2013 earnings announcement.

An FBI surveillance photo of one of the cash exchanges was released to the media.

Shaw pleaded guilty in May 2013 to a charge of conspiracy to commit insider trading.

London, 51, was sentenced in April to 14 months in federal prison for passing insider tips to Shaw.

Wu also ordered London to pay a $100,000 fine and serve three years of probation and community service after his release from prison.

In a separate case brought by the SEC, London has been barred from practicing as an accountant for any company regulated by the SEC.