The Lake Wobegon days of the Conejo Valley are over.
That’s the takeaway from the stunning revelations from April 9-10 that KPMG’s top audit partner for the region, Scott London, and jewelry store owner Bryan Shaw have admitted to insider trading in the shares of publicly traded companies, including Deckers Outdoor Co. in Goleta and the former parent of Santa Barbara Bank & Trust.
What London and Shaw have admitted to cuts to core values of integrity and trust — the real foundations of our free enterprise system. And that collapse of trust has stripped a couple of layers of veneer off the image of exclusivity and success that the Conejo Valley has so successfully created and projected.
Lake Wobegon, as many of you know, is the fanciful Minnesota town created by Garrison Keillor for his American Public Media show “A Prairie Home Companion.” It’s a place where, “all the women are strong, all men are good looking and all of the children are above average.” In the Conejo Valley version of Lake Woe-be-gone, the women are strong because they exercise incessantly in search of the perfect body. The men are sometimes balding and perhaps a bit flabby — but they’re members of the one percent. And the kids are above average because Conejo Valley public schools are the cream of the crop, and because anyone with athletic ability can get college-prep level training at Oaks Christian.
The lake is called Sherwood rather than Wobegon and golf has replaced ice fishing as the favored pastime, but the ideals behind the picturesque communities are the same. Founded as a planned community half a century ago, the iconic locals have included billionaire David Murdock of Dole Food Co. and hockey star Wayne Gretzky.
Amgen, the world’s biggest biotech company, calls Thousand Oaks Home; nearby sits the headquarters of Teledyne, and not too far away are Dole, Inphi and J.D. Power & Associates, now a unit of McGraw-Hill. None of these companies are named in the scandal; neither Deckers nor Union Bank, the new owner of Pacific Capital Bancorp, would comment.
But the U.S. Securities and Exchange Commission complaint filed in conjunction with the London-Shaw affair paints a road map to the Conejo Valley. The two men first meet at North Ranch Country Club, the traditional watering hole for successful members of the area’s elite. Shaw lives in Lake Sherwood, surrounded by all the trappings of successful business ownership; London lives just across the Los Angeles County line in Agoura Hills.
But beneath the shiny veneer is a different story. Far from being a successful small-business owner, Shaw is struggling to deal with a recession that has ravaged luxury goods sales. Until his accounts are frozen because of suspicious trading, Shaw has pocketed — illegally — more than $1.27 million, an amount that a decade or more of selling engagement rings and tennis bracelets would probably not provide in the way of profit.
London benefits, too, receiving entertainment perks, a Rolex watch and $50,000 in cash. In effect, he bought Shaw’s friendship with stock tips, according to the SEC’s complaint.
Across the tri-county region, we’ve seen plenty of our communities get a major wake-up call. The Reed Slatkin and Bernie Madoff Ponzi schemes burned plenty of people in Santa Barbara’s Hope Ranch and Montecito enclaves.
The Willingham strawberry fiasco and the Bobby Caron-Don Lukens schemes took millions from folks in the country club neighborhoods of Ventura, Camarillo and Oxnard.
San Luis Obispo thought it was immune from white collar crime until the Estate Financial and other real estate fiascos exploded when the property market collapsed at the onset of the Great Recession.
But until the London-Shaw insider trading scandal was revealed, the Conejo Valley literally stood above it all. From atop the Conejo grade, its residents could look down on the Oxnard plains and the San Fernando Valley with a bit of attitude. At the onset of the recession, the valley dodged a huge economic bullet when ailing Countrywide Financial was sold to Bank of America.
Thanks to Amgen, a steady exodus of companies from Los Angeles and the aura of the Conejo Valley lifestyle, it weathered the downturn in much better shape than most of Southern California.
But in the wake of revelations that Scott London and Brian Shaw violated the most fundamental principles of ethics and legal conduct, the valley looks a little bit less pristine. But then again, even Lake Wobegon kids have to grow up. And ultimately, that’s what the rise and fall of the jeweler and the KPMG partner is all about.
• Contact Editor Henry Dubroff at email@example.com