Packaging company Sealed Air, currently under investigation by the Securities and Exchange Commission, disclosed in a recent quarterly filing that it now also faces a related investigation by the Department of Justice.
On Aug. 2, Sealed Air disclosed in a quarterly filing that it has received a grand jury subpoena from the U.S. Attorney’s Office for the Western District of North Carolina seeking documents relating to its earlier announced termination of Chief Financial Officer William Stiehl “and relating to the process by which the company selected its independent audit firm, beginning with fiscal year 2015.” In November 2014, Sealed Air disclosed it was switching its auditing firm from KMPG to Ernst & Young.
“We take financial reporting controls and compliance very seriously and are fully cooperating with the regulatory authority,” Lori Chaitman, Sealed Air’s head of investor relations, said during an earnings call. Chaitman said the company wouldn’t comment beyond the Form 10-Q.
The grand jury subpoena followed a disclosure Sealed Air first made on June 19 stating it had terminated Stiehl “for cause” related to an internal review by the audit committee into a previously disclosed SEC investigation, the company stated.
The audit committee’s internal review “followed the company’s receipt of an additional subpoena for documents and information on May 2, 2019, relating to the process by which the company selected its independent audit firm for the period beginning with fiscal year 2015, and relating to the independence of that audit firm,” Sealed Air stated in the June 19 Form 8-K.
In the quarterly filing, Sealed Air said the subpoenas and requests “seek documents and information regarding the company’s accounting for income taxes, its financial reporting, and disclosures, the process by which the company selected its independent audit firm beginning with fiscal year 2015, the independence of that audit firm, and other matters.”
On the same day the board terminated Stiehl, it appointed James Sullivan as chief financial officer, effective June 24. The company said it is “fully cooperating with the SEC and the U.S. Attorney’s Office and cannot predict the outcome or duration of either of those investigations.”