The Securities and Exchange Commission has charged Diamond Foods and two of the San Francisco-based snack foods company’s former executives for their roles in an accounting scheme to falsify walnut costs in order to boost earnings and meet estimates by stock analysts, and the company has agreed to pay $5 million to settle the SEC’s charges.
Diamond’s then-CFO Steven Neil allegedly directed an 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” to manage earnings in Diamond’s financial statements.
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