US: Annie's faces finance, insider trading probe
Annie's management probed over "insider selling"
A US law firm, Kahn Swick & Foti (KSF), has launched an investigation into Annie's over concerns surrounding the organic food group's accounting practices and possible "insider sales".
The probe is being led by former attorney general of Louisiana and KSF partner, Charles Foti.
In a statement, KSF highlighted a series of recent Annie's filing that, the law firm suggested, could indicate problems with the group's accounting practices.
On 2 June, Annie's disclosed that it has "identified a material weakness in its internal control over financial reporting" related "to an insufficient complement of finance and accounting resources, including employee turnover, within the organization resulting in design deficiencies in certain areas in which our controls were not precise enough to detect misstatements that in the aggregate could be material to the consolidated financial statement."
Annie's also revealed that it had not completed its assessment of the company's internal controls. As a consequence it has been unable to file its annual report for fiscal 2014.
On 3 June, Annie's disclosed that its independent accounting firm, PricewaterhouseCoopers LLP, is resigning, effective 11 August 2014.
Moreover, KSF added, during the relevant period Annie's senior management sold off significant chunks of personally held stock. Director Molly Ashbey sold over US$280m of her personally-held stock, president and chief customer officer Mark Mortimer sold over $2.6m-worth of his stock and CEO and director John Foraker sold over $1m worth of his stock.
"KSF's investigation is focusing on whether Annie's and/or its officers and directors violated state or federal securities laws," the firm said.
Annie's share price dipped 0.93% today, falling to $29.79. On 30 May, the last full day of trading prior to Annie's announcements, shares closed at $32.72.
General Mills continues to record growth in packaged food sales although it faces stagnation in some of its core categories, such as breakfast cereals. It is also undermined by a geographic bias towar...
This future-looking global report offers a concise, short-form, visual guide to this key CPG category. It provides a market overview, a review of the big stories affecting the category, a key section...
- What next for Nestle under new CEO Schneider?
- Unilever is "working harder" in tough environment
- Nestle catering for an ageing global population
- Hemp food sales in the US set for growth
- Brexit and UK food market policymaking
- Unilever sees growth but spreads decline continues
- Campbell's Soup's sustainable growth strategy
- Job cuts imminent as General Mills restructures
- Arla Foods unveils strategy for growth up to 2020
- US demand for organic food exceeding supply