ADM Settles Accounting Probe, Tyson Settles Price Fixing Claims

Bloomberg’s Nicola M White, Erin Ailworth, and Isis Almeida reported that “Archer-Daniels-Midland Co. agreed to pay $40 million to settle a two-year federal investigation into the crop giant’s accounting practices that rocked its share price and eroded faith in the company’s transparency.”

“The civil penalty levied by the US Securities and Exchange Commission settles allegations that ADM and former executives engaged in accounting and disclosure fraud when they sought to boost the bottom line of ADM’s flailing nutrition business unit to meet the Chicago-based company’s targets,” White, Ailworth and Almeida reported. “ADM neither admitted nor denied the SEC’s allegations, which regulators detailed late Tuesday. The company also said the Department of Justice has closed its investigation without taking further action.”

“The settlement caps a turbulent period for ADM, during which it lost market share, twice revised its financial statements and dismissed its chief financial officer,” White, Ailworth and Almeida reported. “Chief Executive Officer Juan Luciano also faced criticism as the company grappled with the fallout from the accounting issues.”

Reuters’ Karl Plume and Chris Prentice reported that “the SEC on Tuesday separately sued ADM’s former Chief Financial Officer Vikram Luthar for his role in the allegedly fraudulent adjustments and filed settled charges against two other top executives.”

“The SEC settlement includes charges brought against former Nutrition business unit President Vince Macciocchi and Ray Young, who was ADM’s CFO until 2022. Macciocchi has agreed to pay more than $529,000 in fines and other fees, while Young will pay more than $650,000,” Plume and Prentice reported.

“The SEC complaint against Luthar, filed in the U.S. District Court for the Northern District of Illinois, accuses him of breaking federal securities laws by helping ADM mislead investors and by failing to properly report and account for the company’s activities,” Plume and Prentice reported. “Regulators allege he played a role in fraudulent conduct, helped ADM violate rules and benefitted from the fraud. The SEC is seeking to bar Luthar from serving as an officer or director of a public company, and force him to pay a penalty and other fees. Luthar’s attorney Junaid Zubairi called the allegations ‘meritless’ and said ADM’s own investigation found that Luthar had not acted improperly.”

Tyson Reaches $48 Million Settlement to Resolve Pork Price Fixing Claims

Progressive Farmer’s Todd Neeley reported that “Tyson Foods has reached a $48 million settlement with restaurants, delis and other food service operators who alleged in a 2018 class-action lawsuit that the company conspired with other pork processors to raise prices.”

“The plaintiffs asked the U.S. District Court for the District of Minnesota to grant preliminary approval in a filing with the court on Tuesday. The settlement comes five years almost to the day after JBS reached a $24 million settlement in the case,” Neeley reported. “To date, six different settlements have been reached in the case, including with Smithfield, Seaboard, Hormel and Clemens. The Tyson Foods settlement would bring total monetary relief to more than $114 million, according to the court filing this week.”

“Settlements have yet to be reached with Triumph Foods LLC and Indiana Packers Corp., also among the companies named in the original lawsuit,” Neeley reported.

“‘The settlement agreement is the product of extensive litigation and vigorous arm’s-length negotiation through a mediator following the court’s summary judgment ruling,’ the plaintiffs said in the filing,” according to Neeley’s reporting. “‘By the time the settlement was reached, the CIIPPs (plaintiffs) had developed and assessed both their claims and Tyson’s defenses after years of litigation.'”

Reuters’ Mike Scarcella reported that “the plaintiffs alleged that Tyson and other defendants provided a consulting firm with detailed information about pricing, sales and other industry data that was used to manipulate prices. Tyson and the other settling defendants all denied wrongdoing. …The litigation is part of a broader set of cases accusing beef, turkey and chicken producers of fixing prices in their markets.”