U.S. authorities could file criminal charges against a former senior KPMG auditor and a friend who swapped insider tips on corporate clients of the international accounting firm for cash as soon as Thursday, a source familiar with the matter told Reuters.

Both men are cooperating with the government in its investigation into the tips Scott London, the Los Angeles-based auditor, admitted to giving Brian Shaw, a jeweler, about the companies Herbalife and Skechers.

A person familiar with the case said Shaw made about $1 million trading on the tips, and that Shaw gave London at least $100,000, as well as jewelry, concert tickets and free meals, in return.

The person familiar with the investigation did not want to be identified because formal charges had yet to be filed against either man.

The investigation has already cost London his job and forced KPMG to resign as the auditor for nutritional products group Herbalife and footwear maker Skechers.

It has also prompted some public confessions rarely seen in insider trading cases. Soon after news of the case broke earlier this week, London admitted to the Wall Street Journal he had passed on information about the companies to his friend but said he did not know his friend would trade on it.

London's lawyer told Reuters on Wednesday that was incorrect and that his client did profit from the exchange of the information. The lawyer, Harland Braun, said the case was clear-cut and called the investigation "contained.

As for his client's statements to the press, Braun admitted they were ill-advised.

Legal experts said it was rare for insider trading suspects like London to make public statements, and it could cause more problems for him.

C. Evan Stewart, partner at Zuckerman Spaeder in New York who routinely represents clients charged with insider trading and who is not involved in London's case, said it was hard to see a reason for London's statements.

"I've never seen anything like this in 36 years of practice," he said. "That's certainly not a strategy I would be employing under these circumstances."

Shaw, through his lawyer, also spoke to the press. In a statement his lawyer, Nathan Hochman, emailed Reuters on Thursday, Shaw admitted he had received non-public information from London during a two-year period ending in 2012 and added:

"I cannot begin to apologize for my incredibly stupid actions. There is no excuse for my wrongful conduct."

London and Shaw golfed together, according to London's lawyer.

When Shaw's brokerage firm noticed its client's unusual trading patterns, it cut him off and Shaw and London agreed to end their arrangement. But when U.S. authorities later approached Shaw about his trading, he agreed to cooperate, restarted his tip-sharing relationship with London and recorded him passing on non-public information.

"Over the past several months, I have fully cooperated with the FBI, the SEC and the U.S. Department of Justice in their ongoing investigation of this matter," Shaw said in his statement.

"I expect that my actions will result in significant civil and criminal consequences, but I realize that this is the painful price I will pay for my transgressions."

Of the two sets of comments, it is London's that have potential to do further damage, according to Stewart.

"Mr. London was a very senior KPMG guy who had been counseled by very experienced lawyers on this subject I'm sure on numerous occasions, and then to be out there chatting with the Wall Street Journal about this, it's a very significant setback for his now former firm."

A spokesman for KPMG did not immediately respond to a request for a comment.

(Reporting By Emily Flitter; Editing by Kenneth Barry)