The Securities and Exchange Commission (SEC) has filed charges against Archer-Daniels-Midland Company (ADM) and three former executives for materially inflating the performance of ADM’s Nutrition business segment, a key driver of the company’s growth.
The SEC’s complaint accuses former executive Vikram Luthar of directing improper “adjustments” to Nutrition’s transactions with other ADM segments during fiscal years 2021 and 2022. These adjustments included retroactive rebates and price changes not available to third-party customers, effectively transferring operating profit to Nutrition to meet projected growth targets of 15% to 20% annually.
Former executives Vince Macciocchi and Ray Young were also implicated. Macciocchi and Luthar led efforts to structure these adjustments, while Young negligently approved improper adjustments in 2019 and 2021. The SEC found that these actions rendered ADM’s financial reports false and misleading, overstating Nutrition’s operating profit for multiple years and quarters.
ADM cooperated with the SEC, conducting an internal investigation and implementing significant remedial measures, including new accounting controls and policy amendments. The company agreed to a $40 million civil penalty. Macciocchi and Young agreed to pay disgorgement, prejudgment interest, and civil penalties totaling hundreds of thousands of dollars. Macciocchi also accepted a three-year ban from serving as an officer or director.
The SEC’s complaint, filed in the U.S. District Court for the Northern District of Illinois, seeks permanent injunctions, officer and director bars, disgorgement of ill-gotten gains, civil penalties, and reimbursement of executive compensation under the Sarbanes-Oxley Act.
Judge Margaret A. Ryan, Director of the SEC’s Division of Enforcement, emphasized the importance of transparent disclosure to maintain market integrity and credited ADM’s cooperation and remediation efforts.
