Cronos avoids fine in SEC settlement over accounting errors
Canadian cannabis company Cronos Group and its former chief commercial officer each avoided fines in reaching settlements with the Securities and Exchange Commission (SEC) announced Monday over alleged accounting fraud.
Cronos, a Nasdaq-listed company since 2018, submitted inaccurate financial statements to the SEC in two quarters in 2019 when it improperly recognized revenue from the sale of cannabis flower and purchase of a finished cannabis product, the agency stated in its order. In one of the quarters, William Hilson, Cronos’s former chief commercial officer, allegedly entered into an undisclosed oral agreement to sell cannabis flower and then repurchase finished cannabis product in the following quarter.
Hilson didn’t report the agreement to the SEC or Cronos, which discovered the accounting errors through an internal investigation, according to the SEC.