Saturday, July 12, 2014

SEC reaches settlement with Diamond Foods

January 09. 2014 2:36PM
Associated Press

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(AP) The Securities and Exchange Commission has charged Diamond Foods and two of its former executives for their roles in an accounting scheme to falsify walnut costs in order to boost earnings for the snack food maker.

Diamond Foods will pay $5 million to settle the charges. Former CEO Michael Mendes has also agreed to settle charges against him. But the SEC said Thursday that its litigation continues against former Chief Financial Officer Steven Neil.

The SEC says Neil directed the effort to underreport money paid to walnut growers by pushing the recording of payments into later fiscal periods. That, in turn, made the company's earnings results appear better than they were.

Diamond later restated its financial results to reflect the true costs, but the scandal severely damaged its stock price.

Associated Press

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