Newell Brands, maker of Sharpie markers and Rubbermaid containers, and its former CEO Michael Polk with misleading investors over financial accounting practices. Newell will pay$12.5 million to settle the matter. The agency says that Newell announced strong or solid results in quarters that it internally said were disappointing because of poor sales.
“Today’s order finds that 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,” said Mark Cave, Associate Director of the SEC’s Division of Enforcement. “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.”
The SEC’s order finds that Newell and Polk violated or caused violations of antifraud provisions of the Securities Act of 1933, reporting provisions of the Securities Exchange Act of 1934, and Rule 100(b) of Regulation G. Without admitting or denying the SEC’s findings, Newell and Polk agreed to cease and desist from violating certain provisions of the securities laws and to pay civil penalties of $12.5 million and $110,000, respectively.
The SEC’s investigation was conducted by Nishchay Maskay, Armita Cohen, and Nicholas Brady and accountants John Archfield and Tonya Tullis, with assistance from trial counsel Timothy Halloran and Alex Lefferts of the Enforcement Division’s Office of Investigative and Market Analytics, under the supervision of Sarah Hall, Kristen Dieter, Melissa Armstrong, and Mr. Cave. Here is the SEC’s Order: https://www.sec.gov/files/litigation/admin/2023/33-11251.pdf
JEFFREY NEWMAN IS A WHISTLEBLOWER LAWYER WHO HANDLES CASES UNDER THE SEC, CFTC AND FINCEN WHISTLEBLOWER PROGRAMS AS WELL AS HEALTHCARE FRAUD CASES UNDER THE FALSE CLAIMS ACT. HE CAN BE REACHED AT JEFF@JEFFNEWMANLAW.COM
