SEC Authorizes Diamond Foods Settlement
Diamond Foods has started to put to rest a long-running controversy over its payments to suppliers. In a document filed with the Securities and Exchange Commission today, the company said the SEC has authorized a $5 million settlement between the two parties regarding the former's accounting in regard to payments it made to walnut growers. In the filing, Diamond Foods said that by settling the matter, it is neither admitting nor denying its guilt.
In late 2011, allegations surfaced that the company had underreported certain payments to those nut farmers, skewing the firm's accounting. This grew into a scandal that saw the departure of the company's CEO Michael Mendes and CFO Steven Neil in its wake. Following an internal investigation, the firm eventually restated its fiscal 2010 and 2011 results.
The settlement is a quick one, coming on the heels of the SEC's formal announcement that it would bring charges against the company, as well as Mendes and Neil, over the matter. Mendes has agreed to settle the charges against him, while Neil has opted to contest those targeting him.
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