The Securities and Exchange Commission charged American Italian Pasta Co. and its former senior executives with participating in a fraudulent accounting scheme to artificially increase the company's stock price, and the company agreed to pay $7.5 million to settle the charges.
The SEC alleged that AIPC's former CEO Timothy S. Webster, former CFO Warren B. Schmidgall and former executive vice president of corporate development and strategy David E. Watson, orchestrated the scheme. Webster agreed to pay $1 million to settle the SEC charges. He and Schmidgall also pled guilty to one count of conspiracy to commit wire fraud for their roles in concealing AIPC's financial condition and filing materially false statements with the SEC.
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