ConAgra Foods agreed to pay $45 million to settle civil charges of financial fraud and improper accounting practices, the U.S. Securities and Exchange Commission said Wednesday.
The SEC said ConAgra had misused corporate reserves to manipulate earnings in its 1999 fiscal year, and a former subsidiary engaged in improper revenue recognition in 2000. The company also made numerous tax errors from 2002 through 2005, the agency said.
The SEC said that without engaging in improper and at times fraudulent accounting practices, ConAgra would have missed Wall Street estimates for at least six of 11 fiscal quarters from 1999 through 2001.
Between the first quarter of fiscal 1999 and the third quarter of fiscal 2001, ConAgra misstated reported income before income taxes by almost $218.5 million, the SEC said.
ConAgra spokeswoman Stephanie Childs said in a statement that the settlement would not affect earnings for current or future years.
"The company has already recorded charges totaling $47.7 million in anticipation of the expected settlement with the SEC," she said.
ConAgra, an international food company based in Omaha, Nebraska, settled without admitting or denying the SEC's allegations, the agency said.
"The facts here are particularly troubling because of the number of different improprieties engaged in by ConAgra, the length of time over which they occurred, and the fact that senior management was involved in the misconduct," SEC Enforcement Director Linda Thomsen said in a statement.
Earlier this year, the SEC settled with six former ConAgra executives, including its former chief financial officer, its former vice president of operations and control, two former corporate controllers, and two senior executives at former subsidiary United Agri-Products.
The SEC will seek to place the $45 million penalty into a fund to be distributed to harmed investors.
In early afternoon trading, ConAgra shares were off 6 cents at $26.20.