KPMG faces twin probes over audit integrity and insider bets

The accounting giant KPMG finds itself at the center of two separate controversies calling its audit practices into question — one involving suspicious betting patterns on a cryptocurrency prediction market and the other a formal regulatory investigation into the audits of a collapsed British oil company.

Polymarket Betting Pattern Raises Insider Trading Concerns

The Wall Street Journal News Corp ↘ 0.21% reported on Friday that a cluster of 19 connected accounts on Polymarket, the blockchain-based prediction market, achieved a 98% success rate when betting on the earnings outcomes of companies audited by KPMG. The accounts collectively earned approximately $22,000 through wagers on 18 KPMG-audited firms, including Wells Fargo ↗ 0.94%, Home Depot The Home Depot, Inc. ↗ 1.00%, and DoorDash ↗ 0.46%.wsj+2

The pattern was first identified earlier this year by blockchain analytics firm Bubblemaps and has since drawn wider attention. The bets began in November 2025 and continued over several months.unchainedcrypto+1

The findings come weeks after the Journal reported in August that federal authorities are preparing insider trading charges against a KPMG employee who allegedly placed bets on a client's earnings on prediction markets. That case is part of a broader crackdown on prediction market insider trading that also targets a U.S. servicemember suspected of profiting from bets on military operations.x+1

Forbes reported in April that more than a dozen wallet addresses exhibited similar betting behavior, with the trail pointing toward how American earnings get audited in India.forbes

FRC Opens Probe Into Prax Group Audits

Separately, Britain's Financial Reporting Council announced on Friday that it has launched three investigations into the auditing and financial oversight of State Oil Limited, the parent company of Prax Group. The probes will examine KPMG's statutory audits of State Oil's consolidated financial statements for the fiscal years ended February 2022 and February 2023.frc+1

KPMG resigned as Prax's auditor before the energy company's financial collapse, and mid-tier firm PKF Littlejohn took over. PKF's audit for the fiscal year ended February 2024 is also under investigation. The FRC's conduct committee authorized the probes on July 21, and the regulator noted that opening an investigation does not constitute a finding of misconduct.cityam+1

Prax Group plunged into insolvency in June 2025 with more than £1.5 billion in debts, according to the Financial Times and the Telegraph, threatening more than 400 jobs at its Lindsey Oil Refinery in North Lincolnshire. Hundreds of former workers are now pursuing legal claims through employment tribunals over redundancies carried out without a consultation period.telegraph+1

A Pattern of Regulatory Pressure

The twin controversies add to a mounting series of regulatory challenges for KPMG in the United Kingdom, where the FRC has also recently opened a probe into the firm's 2023 audit of John Wood Group. For Polymarket, the KPMG betting pattern underscores persistent questions about whether prediction markets can police the use of nonpublic information — a challenge that has prompted the platform to audit third-party startups in its Builders Program that were marketing tools to copy trades from accounts suspected of exploiting inside knowledge.news.bloombergtax+1