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AgFeed Industries to Pay $18 Million for Accounting Fraud

Jaclyn Jaeger | September 17, 2014

AgFeed Industries agreed last week to pay back $18 million in illicit profits to victims arising from an accounting fraud that resulted in an enforcement action brought by the Securities and Exchange Commission earlier this year.

The SEC charged the animal feed company, currently in Chapter 11 bankruptcy, and several of its senior-level executives in March with repeatedly reporting fake revenues from the company’s China operations in order to meet financial targets and prop up AgFeed’s stock price. The company obtained illicit gains in stock offerings to investors at the inflated prices resulting from the accounting scheme. The SEC also alleged that U.S. managers learned of the accounting fraud, but failed to take adequate steps to investigate and disclose it to investors.

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