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FBI investigates KPMG, Herbalife and Skechers reports withdrawn

Staff writer |
Herbalife and Skechers USA said that KPMG had quit as their auditor in connection with alleged leaks of nonpublic information. FBI is investigating KPMG over insider trading allegations.

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Skechers USA announced that KPMG resigned at April 8, 2013, as independent auditor of Skechers due to misconduct by KPMG's lead Audit Engagement Partner on the Skechers account. In connection with its resignation, KPMG has publicly stated that it has "no reason to believe that the financial statements of Skechers have been materially misstated."

"KPMG has advised us that that they have no reason to believe that there were any misstatements in our financial statements, and we firmly believe that there has been no misstatements of our results or financial condition," said David Weinberg, Skechers chief operating officer and chief financial officer and added that the company is "working diligently to replace KPMG as quickly and efficiently as possible as we look forward to releasing positive results for the first quarter of 2013 later this month."

Upon resignation, Skechers was informed by KPMG that KPMG's lead Audit Engagement Partner on the Skechers account is under federal investigation for providing non-public information of his clients to a third party in exchange for money. The third party then used that information to trade stocks of several West Coast companies. Thus, KPMG had to resign as Skechers auditors immediately and withdraw its auditors' reports for the fiscal years 2011 and 2012.

Herbalife also announced that KPMG notified it on April 8, 2013, that KPMG was resigning, effective immediately, as Herbalife's independent accountant. KPMG notified Herbalife that itss independence had been impaired and it had no option but to withdraw its audit reports on Herbalife's financial statements for the fiscal years ended December 31, 2010, 2011 and 2012 and the effectiveness of internal control over financial reporting as of December 31, 2010, 2011 and 2012 and that such reports should no longer be relied upon.

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