AgFeed to pay $18M in fraud case
Sept. 17, 2014
by Meat&Poultry Staff
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WASHINGTON – AgFeed Industries agreed to pay $18 million to settle an accounting fraud case that resulted civil charges against the company earlier this year, the Securities and Exchange Commission (SEC) reported. AgFeed Industries is a Tennessee-based international agribusiness with operations in the United States and China.
The SEC filed civil charges against several top executives at AgFeed for their involvement in a massive accounting fraud. The SEC alleged that four executives based in China orchestrated the fraud in which they reported fake revenues from their China operations and inflated hog weights to inflate sales. The agency also charged an executive and a company director in the US with trying to delay reporting the fraud once they learned about it. The SEC's case continues against five former company executives and a former audit committee chair.
The funds will be distributed to victims of the company's fraud, the agency said. The settlement is subject to court approval by the bankruptcy court as well as the district court in Tennessee where the case was filed.
“This settlement holds AgFeed accountable for its accounting fraud and deprives the company of ill-gotten gains,” said Julie Lutz, director of the SEC’s Denver Regional Office. “This provides the most expedient and effective way to provide a substantial recovery to victims of AgFeed’s fraud while the company remains in bankruptcy.”
AgFeed also agreed to the entry of a permanent injunction prohibiting the company from the antifraud, periodic reporting and recordkeeping and internal control provisions of the federal securities laws. AgFeed neither admits nor denies the charges in the settlement.