Consumer products company Newell Brands agreed to pay $12.5 million as part of a settlement with the Securities and Exchange Commission (SEC) addressing allegations the company misled investors about its core sales growth.

The company’s former chief executive, Michael Polk, settled with the SEC over similar charges. He was fined $110,000, the agency announced in a press release Friday.

The details: The charges date back to 2016 and 2017, when Newell allegedly used a non-GAAP (generally accepted accounting principles) measure to explain sales trends to investors.

Newell and Polk took steps to artificially inflate the sales growth figures disclosed to investors, according to the SEC’s order. The company told investors it was experiencing “strong” and “solid” sales growth, while internally it discussed sales trends as disappointing and leading to a shortfall.

Compliance considerations: Newell moved sales into earlier quarters to make them appear more robust without adequate disclosure, the SEC said. The company allegedly engaged in practices against GAAP and overrode its own internal accounting controls in an effort to mislead investors into believing it met its sales targets.

Newell and Polk caused violations of the SEC’s antifraud provisions, the agency said.

The SEC has been investigating Newell since at least 2020, when the company said in a regulatory filing it received a subpoena from the agency.

The company said at the time it was cooperating with the SEC and provided all information requested.

“Newell’s former CEO issued an instruction to ‘scrub’ the company’s accruals after he learned that the company was projecting a ‘massive’ and ‘disappointing’ miss for the quarter,” Mark Cave, associate director of the SEC’s Division of Enforcement, said in the release. “Senior executives of public companies hold positions of trust, and they risk abusing the duties attendant to their offices when they reach into a company’s accounting control processes as a way of making up for performance shortfalls.”

Newell did not respond to a request for comment. The company and Polk neither admitted nor denied the SEC’s findings.