SEC Charges Diamond Foods and Two Former Executives Following Accounting Scheme to Boost Earnings Growth
The Securities and Exchange Commission today charged San Francisco-based snack foods company Diamond Foods and its former CFO in an accounting scheme to falsify walnut costs in order to boost earnings and meet estimates by stock analysts. The SEC also charged Diamond’s former CEO for his role in the company’s false financial statements filed with the SEC. The SEC alleges that Diamond’s then-chief financial officer Steven Neil directed the effort to fraudulently underreport money paid to walnut growers by delaying the recording of payments into later fiscal periods. In internal e-mails, Neil referred to these commodity costs as a “lever”…
Read MoreSEC Charges Alcoa With FCPA Violations
The Securities and Exchange Commission today charged global aluminum producer Alcoa Inc. with violating the Foreign Corrupt Practices Act (FCPA) when its subsidiaries repeatedly paid bribes to government officials in Bahrain to maintain a key source of business. An SEC investigation found that more than $110 million in corrupt payments were made to Bahraini officials with influence over contract negotiations between Alcoa and a major government-operated aluminum plant. Alcoa’s subsidiaries used a London-based consultant with connections to Bahrain’s royal family as an intermediary to negotiate with government officials and funnel the illicit payments to retain Alcoa’s business as a supplier…
Read MoreSEC Names Michael Osnato as Chief of Enforcement Division’s Complex Financial Instruments Unit
The Securities and Exchange Commission today announced that Michael J. Osnato, Jr. has been named chief of the Enforcement Division unit that conducts investigations into complex financial instruments. Mr. Osnato, who joined the SEC staff in 2008 and has served as an assistant director in the New York Regional Office since 2010, has played a key role in a number of significant SEC enforcement actions. For instance, Mr. Osnato helped spearhead the SEC’s case against JPMorgan Chase & Co. and two former traders for fraudulently overvaluing a complex trading portfolio in order to hide massive losses, and the subsequent action…
Read MoreEnforcement Co-Director George Canellos to Leave SEC
The Securities and Exchange Commission today announced that George S. Canellos, co-director of its Enforcement Division, will leave the agency later this month after four-and-a-half years of service in senior leadership positions. Mr. Canellos has played a key role in numerous structural and enforcement policy changes and oversaw significant investigations and enforcement actions related to the credit crisis and insider trading. He helped lead the agency’s nationwide enforcement efforts during two of its most productive years in 2012 and 2013 while serving as deputy director and co-director of the Enforcement Division. Mr. Canellos came to the SEC in July 2009…
Read MoreAgencies Reviewing Treatment of Collateralized Debt Obligations Backed by Trust Preferred Securities under Final Rules Implementing the “Volcker rule”
The Federal Reserve Board, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Securities and Exchange Commission on Friday said they are reviewing whether it would be appropriate and consistent with the Dodd-Frank Wall Street Reform and Consumer Protection Act not to subject collateralized debt obligations backed by trust preferred securities to the investment prohibitions of section 619 of Dodd-Frank, otherwise known as the “Volcker rule.” The agencies intend to address the matter no later than January 15, 2014. The accounting staffs of the agencies believe that, consistent with generally accepted accounting principles, any…
Read More