The U.S. Securities and Exchange Commission has brought enforcement actions against Archer-Daniels-Midland Company and several of its former senior executives, alleging accounting and disclosure fraud tied to the company’s Nutrition business.
This enforcement action centers on allegations that ADM materially overstated the performance of its Nutrition segment, a business line the company repeatedly promoted as a major engine of long-term growth. According to the SEC, improper accounting adjustments distorted financial results across multiple reporting periods, misleading investors about the segment’s true profitability.
SEC Enforcement Action Against ADM and Senior Executives
The SEC filed settled charges against ADM and former executives Vince Macciocchi and Ray Young, while pursuing a litigated action against former executive Vikram Luthar. The agency alleges that improper accounting practices inflated reported operating profit within the Nutrition segment during fiscal years 2019, 2021, and 2022.
Regulators assert that the conduct violated federal securities laws governing antifraud protections, financial reporting accuracy, internal accounting controls, and books and records requirements. The alleged misconduct extended beyond isolated errors and instead reflected a pattern of targeted adjustments designed to meet preannounced profit expectations.
Allegations of Inflated Nutrition Segment Performance
At the core of the SEC’s case is the claim that ADM overstated the operating performance of its Nutrition business at a time when that segment was failing to meet internal profit targets. The SEC alleges that executives sought to preserve the appearance of consistent growth by shifting profits from other ADM business units into Nutrition through accounting adjustments that lacked economic substance.
The Nutrition segment was repeatedly presented to investors as a key growth driver, with projected annual operating profit growth of 15% to 20%. When actual results fell short, the SEC alleges that executives intervened to manipulate intersegment transactions rather than disclose the underperformance.
Improper Intersegment Accounting Adjustments
According to the SEC, the adjustments involved retroactive rebates and price changes applied to transactions between ADM business segments. These adjustments were not made available to third-party customers and were not consistent with market-based pricing.
The SEC alleges that these one-sided transfers of operating profit were structured to achieve precise dollar amounts needed to meet or mask shortfalls against internal profit targets. By retroactively modifying transaction terms, the company altered reported financial results without reflecting genuine economic activity.
These practices allegedly contradicted ADM’s public disclosures that intersegment transactions were recorded at amounts approximating market rates, rendering the company’s periodic reports materially false and misleading.
Role of Former Executives in the Accounting Scheme
The SEC’s complaint alleges that Vikram Luthar played a central role in directing improper adjustments when the Nutrition segment failed to meet its targets in fiscal years 2021 and 2022. The agency claims he led efforts to identify and implement accounting changes specifically designed to inflate operating profit.
The settled order further finds that Vince Macciocchi participated in structuring these adjustments alongside Luthar, while Ray Young negligently approved improper accounting entries in certain reporting periods, including fiscal years 2019 and 2021.
Regulators concluded that these actions contributed directly to the overstatement of Nutrition’s operating profit across multiple annual and quarterly reporting periods.
False and Misleading Financial Disclosures to Investors
The SEC alleges that the improper adjustments distorted ADM’s annual and quarterly financial statements over several years. As a result of the adjustments, the company overstated operating profit for the Nutrition segment in fiscal years 2019, 2021, and 2022, as well as in the third quarter of 2019 and every quarter of 2021.
These misstatements allegedly undermined the reliability of ADM’s public filings and deprived investors of accurate information needed to assess the company’s financial performance and growth prospects.
The SEC emphasized that transparent and accurate disclosure remains fundamental to market integrity, particularly when a company highlights a specific business segment as a cornerstone of its growth strategy.
Litigated Claims Against Former Executive Vikram Luthar
The SEC filed its complaint against Luthar in the U.S. District Court for the Northern District of Illinois. The agency charges him with violating antifraud provisions of the federal securities laws and with aiding and abetting ADM’s violations of reporting, internal controls, and books and records requirements.
In addition to injunctive relief, the SEC seeks disgorgement of alleged ill-gotten gains, prejudgment interest, civil penalties, and an officer and director bar. The complaint also seeks reimbursement of certain executive compensation under the Sarbanes-Oxley Act, reflecting the SEC’s increased use of clawback provisions in enforcement actions involving financial misconduct.
Settlements with ADM, Macciocchi, and Young
Without admitting or denying the SEC’s findings, ADM, Macciocchi, and Young agreed to settle the charges against them. As part of the settlement, they consented to cease-and-desist orders prohibiting future violations of the relevant securities laws.
ADM agreed to pay a $40 million civil penalty. Macciocchi agreed to pay disgorgement and prejudgment interest totaling $404,343, along with a $125,000 civil penalty and a three-year officer and director bar. Young agreed to pay disgorgement and prejudgment interest totaling $575,610 and a $75,000 civil penalty.
The SEC also established a Fair Fund to distribute the monetary relief to investors harmed by the misconduct, ensuring that penalties serve a compensatory function in addition to deterrence.
ADM Cooperation and Remedial Measures
The SEC credited ADM for its cooperation and extensive remediation efforts when determining the settlement terms. The company conducted an internal investigation, voluntarily disclosed its findings to the SEC staff, and provided additional financial analyses prepared by an independent accounting expert.
ADM also implemented new internal accounting controls governing intersegment transactions, revised its policies and procedures, and tested the effectiveness of its enhanced controls. These measures were designed to prevent future accounting and disclosure violations and to strengthen the integrity of the company’s financial reporting framework.
The SEC emphasized that meaningful cooperation and proactive remediation can materially influence enforcement outcomes, particularly in complex accounting cases involving large public issuers.
Implications for Public Companies and Executives
This enforcement action underscores the SEC’s heightened scrutiny of segment reporting, internal transfers, and management-driven accounting adjustments. Companies that rely on intersegment transactions must ensure that such transactions reflect economic reality and align with disclosed accounting policies.
The case also reinforces the personal accountability of senior executives who participate in or approve accounting practices that mislead investors. The SEC’s pursuit of officer and director bars, disgorgement, and compensation reimbursement signals a continued emphasis on individual responsibility alongside corporate penalties.
For more information, contact the securities lawyers at Sallah Astarita & Cox, at 212-509-6544 or visit Securities Lawyer
Editor’s Note: Readers are reminded that the SEC often over-charges, and ultimately backs down on its charges once a target mounts a defense. Unless the release indicates that the respondent has settled the charges, these are the SEC’s allegations, not evidence of wrongdoing. The respondent has not yet had the opportunity to present evidence or to counter the allegations contained in the SEC Press Release.
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Last updated on January 29th, 2026
