ConAgra to pay $45 M to settle SEC charges

Omaha-ConAgra Foods Inc. has agreed to pay $45 million to settle civil charges brought by the Securities Exchange Commission alleging that it engaged in improper ?Çô and in certain cases, fraudulent ?Çô accounting practices during fiscal years 1999-2001. The SEC will put the money into a Fair Fund for distribution to harmed investors. In related news, the company and insurers have reportedly agreed to pay $4 million to settle three retiree lawsuits over the restated earnings. ConAgra does not admit or deny the allegations in the SEC complaint. SEC said the fraudulent practices involved the misuse of corporate reserves to manipulate reported earnings in fiscal year 1999, and a scheme in 2000 at its former subsidiary, United Agri Products (UAP), that involved, among other things, improper and premature revenue recognition. The complaint also alleges that between fiscal years 2002-2005, ConAgra’s corporate tax department made numerous tax errors, causing the company to improperly account for tax benefits and understate its income tax expense. Between the first quarter of fiscal year 1999 and the third quarter of fiscal 2001, ConAgra misstated its reported income before income taxes by nearly $218.5 million. As a result of the tax errors, ConAgra misstated its reported income tax expense by $105 million. ConAgra has restated its financial results for the years 1999-2005. Earlier this year, the SEC settled claims with former ConAgra executives, including CFO James O’Donnell ($699,682, plus divest 17,648 shares of unexercised stock options), Controller James Bolding ($600,606), Controller Kenneth DiFonzo ($205,578 and divest 20,192 in unexercised stock options), Vice President of Taxes Debra Keith ($211,681 and 2,872 in ConAgra stock and 866 in stock options), Executive Vice President of Operations and Control Dwight Goslee ($45,000), Director of Corporate Accounting Harry Hill ($35,219), President and COO of ConAgra Agri Products Companies James Charles Blue ($622,087), and UAP Controller Victor Campbell ($198,074). A complaint was still pending against former President of North America Operations of UAP Randy Cook, according to SEC records.