WASHINGTON (dpa-AFX) - The U.S. Securities and Exchange Commission has ordered Archer-Daniels-Midland Company (ADM) to pay a $40 million civil penalty after finding the company and three former executives engaged in accounting and disclosure fraud. Former executives Vince Macciocchi and Ray Young also agreed to pay disgorgement and penalties totaling nearly $1.2 million, while Macciocchi accepted a three-year officer and director bar.
According to the SEC, ADM's Nutrition segment performance was materially inflated through improper 'adjustments' between 2019 and 2022, including retroactive rebates and price changes not offered to third-party customers. These adjustments were designed to make Nutrition appear to meet profit growth targets of 15-20% annually, misleading investors and overstating operating profits in multiple fiscal years.
The SEC credited ADM for its cooperation and significant remediation, including conducting an internal investigation, voluntarily reporting findings, and strengthening internal accounting controls. A Fair Fund will be established to distribute monetary relief to harmed investors.
The Commission also filed a litigated action against former executive Vikram Luthar, alleging he directed the improper adjustments and violated antifraud provisions. The complaint seeks injunctions, civil penalties, and reimbursement of executive compensation under the Sarbanes-Oxley Act.
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