AgFeed Industries Inc. (fka FEEDQ)

[Renee]

SamLevi....I'm unsure how todays SEC release will impact AgFeed's distribution. Thoughts?

Courtesy Scion:

Tennessee-Based Animal Feed Company Agrees to Pay $18 Million to Settle Accounting Fraud Case

FOR IMMEDIATE RELEASE
2014-194

Washington D.C., Sept. 15, 2014 — The Securities and Exchange Commission today announced that a Tennessee-based animal feed company has agreed to pay back $18 million in illicit profits from an accounting fraud that resulted in an SEC enforcement action earlier this year.

AgFeed Industries, which is currently in Chapter 11 bankruptcy, was charged by the SEC in March along with top company executives for repeatedly reporting fake revenues from the company’s China operations in order to meet financial targets and prop up AgFeed’s stock price. The company obtained illicit gains in stock offerings to investors at the inflated prices resulting from the accounting scheme. The SEC also alleged that U.S. managers learned of the accounting fraud, but failed to take adequate steps to investigate and disclose it to investors.

The $18 million to be paid by AgFeed to settle the SEC’s case will be distributed to victims of the company’s fraud. Details of the settlement were presented to the bankruptcy court in Delaware earlier today, and the settlement is subject to court approval by the bankruptcy court as well as the district court in Tennessee where the case was filed.

The SEC’s case continues against five former company executives and a former audit committee chair.

“This settlement holds AgFeed accountable for its accounting fraud and deprives the company of ill-gotten gains,” said Julie Lutz, Director of the SEC’s Denver Regional Office. “This provides the most expedient and effective way to provide a substantial recovery to victims of AgFeed’s fraud while the company remains in bankruptcy.”

Under the proposed settlement, AgFeed also agrees to the entry of a permanent injunction enjoining it from the antifraud, periodic reporting, and record keeping and internal control provisions of the federal securities laws. AgFeed neither admits nor denies the charges in the settlement.

The SEC’s investigation has been conducted by Michael Cates, Donna Walker, and Ian Karpel of the Denver Regional Office. The court litigation is being led by Gregory Kasper and Nancy Ferguson while the bankruptcy aspects of the case are being handled by Alistaire Bambach, Patricia Schrage, and Neal Jacobson of the New York Regional Office.

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http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370542938017#.VBc_7fldXHQ