The U.S. Securities and Exchange Commission filed settled charges against Archer-Daniels-Midland Company (ADM) and former executives Vince Macciocchi and Ray Young, and brought a litigated action against former executive Vikram Luthar, alleging accounting and disclosure fraud that materially inflated the performance of ADM’s Nutrition segment. ADM agreed to pay a USD 40 million civil penalty, and the SEC’s order establishes a Fair Fund to distribute monetary relief to harmed investors. The SEC alleged that, when Nutrition fell short of operating profit targets, “adjustments” were made to intersegment transactions through retroactive rebates and price changes not available to third-party customers, effectively transferring operating profit to Nutrition to meet goals and support projected 15% to 20% annual operating profit growth. The settled order finds these adjustments were targeted to specific dollar amounts and rendered ADM’s periodic reports false and misleading, including by making intersegment transactions inconsistent with the company’s representation that they were recorded at amounts “approximating market,” and it finds Nutrition’s operating profit was overstated for fiscal years 2019, 2021, and 2022, the third quarter of 2019, and all quarters in 2021. Without admitting or denying the findings, Macciocchi and Young agreed to cease-and-desist relief and to pay disgorgement and penalties (Macciocchi: USD 404,343 in disgorgement and prejudgment interest plus a USD 125,000 penalty and a three-year officer and director bar; Young: USD 575,610 in disgorgement and prejudgment interest plus a USD 75,000 penalty), while the SEC credited ADM’s cooperation and remediation, including an internal investigation, voluntary reporting, use of an outside accounting expert, and new controls and procedures for intersegment transactions. The complaint against Luthar, filed in the U.S. District Court for the Northern District of Illinois, seeks permanent injunctions, an officer and director bar, disgorgement with prejudgment interest, civil penalties, and reimbursement of certain executive compensation under the Sarbanes-Oxley Act. ADM also undertook to cooperate fully with the Commission in the litigation and related proceedings.
U.S. Securities & Exchange Commission 2026-01-27
U.S. Securities and Exchange Commission charges ADM and former executives over inflated Nutrition segment results and orders USD 40 million penalty
The U.S. Securities and Exchange Commission (SEC) filed settled charges against Archer-Daniels-Midland Company (ADM) and former executives for accounting and disclosure fraud, resulting in a USD 40 million civil penalty and the establishment of a Fair Fund for investors. The SEC also brought a litigated action against former executive Vikram Luthar, seeking various penalties, while ADM agreed to cooperate fully with the SEC.