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"I cannot begin to apologize for my incredibly stupid actions," said Shaw. "There is no excuse for my wrongful conduct. I accept full and complete responsibility for what I have done and know that I will spend the rest of my life trying to make up for my tragic lapses of judgment." Hochman said Thursday that Shaw received a government subpoena several months ago and has been cooperating with the investigation. "As part of that cooperation, he agreed to make monitored phone calls with Mr. London, and have monitored meetings with him as well," Hochman said in a phone interview. London has said that he never leaked any documents, and has described the interactions as his friend asking whether a stock was a good buy and London offering suggestions. London made his first court appearance Thursday afternoon in Los Angeles and was released on $150,000 bond, with his wife putting up $50,000 in cash and the deed to their Agoura Hills, Calif., home. Braun said Thursday that London will plead guilty to the criminal charge when he next appears in court on May 17. London discovered that he was the target of an investigation when the FBI came to his home and showed London a picture of him accepting cash, Braun said. London then spoke with investigators for three hours, admitting his role. Braun said that his client came to him chiefly concerned about protecting KPMG from the scandal's fallout. Braun maintains that London's honesty in admitting his sole culpability "saved the country from a stock market crash" that could have ensued if investors, spooked by the prospect that KPMG's audits were widely tainted, started selling off stock in many companies. In a statement late Thursday, KPMG's CEO John Veihmeyer said he was "appalled" by the details that emerged in the complaint against London. He said that because of London's alleged actions, KPMG would step down as independent auditor of Herbalife and Skechers. But he added that there was no reason to believe the company's financial statements were inaccurate. Veihmeyer said KPMG also planned to take legal action against London. "We unequivocally condemn his actions, and deeply regret the impact that his violations of trust and the law have had on our clients and our people," he said. The SEC is seeking unspecified penalties and restitution against London and Shaw. The criminal charge against London carries a maximum penalty of 5 years in prison, and a fine of at least $250,000.
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