KPMG was forced to resign as auditor for Herbalife and Skechers, both companies announced on Tuesday after a senior partner named Scott London was discovered to be at the center of an insider trading probe and was fired by the accounting firm, a source familiar with the matter told CNBC.
In separate statements, Herbalife and Skechers acknowledged that KPMG had resigned as their auditor. The shares of both companies were halted during early trading, with speculation rife about the nature of the move.
In a statement, KPMG confirmed that it was resigning from two clients but did not name either one.
The accounting giant said that a senior partner based in Los Angeles provided inside information to an unnamed individual, who then used it to engage in stock trades of key companies on the West Coast. According to the firm, the partner acted "with deliberate disregard for KPMG's long-standing culture of professionalism and integrity."