FBI agents delivered grand jury subpoenas to current and former employees of grain trader Archer-Daniels-Midland this week, three sources with knowledge of the matter told Reuters.
The subpoenas were signed by officials at the US attorney’s Manhattan office and delivered to recipients’ homes in the Decatur, Illinois, area where ADM has major operations.
They show that a criminal probe into ADM’s accounting issues first reported by Reuters last month is escalating fast and directly relates to accounting issues that the company said in January were the subject of an internal probe.
Grand jury subpoenas order the recipient to produce documents or testify before a grand jury.
The subpoenas seek information, communications, as well as devices containing those communications, relating to certain ADM accounting information, including details on goods and cash transferred between company segments, according to the three sources.
Authorities were also seeking information on below-cost sales from the Carbohydrate Solutions and Agricultural Services & Oilseeds units to the nutrition division, one said.
They also require the recipients to report to a New York courthouse in coming weeks, the three people said. Reuters could not immediately determine the number of subpoenas issued.
Government investigations are not evidence of wrongdoing and do not necessarily result in charges.
A spokesperson for ADM, a US$28 billion commodities giant which makes animal feed, sweeteners and other products, declined to comment.
Shares of ADM briefly turned lower after the Reuters story was published but ended the regular session 0.2 per cent higher at US$54.25. The shares were down 0.5 per cent after-hours.
Spokespeople for the US attorney’s office and the Federal Bureau of Investigation, which is part of the Justice Department, declined to comment.
A probe by the Justice Department, which has the power to bring criminal charges and impose steep fines, increases pressure on ADM and will likely weigh on its share price.
The company’s shares are down 20 per cent since it disclosed in late January that it had suspended its chief financial officer and was delaying financial results amid an internal probe into accounting practices related to its Nutrition division.
ADM said at the time that a Securities and Exchange Commission (SEC) inquiry prompted the company’s probe.
ADM said on Thursday it would report financial results on March 12.
Last week, ADM said in an SEC filing that it would correct certain sales between units within ADM because they were not recorded at approximate market value. The corrections are not expected to impact consolidated balance sheets, statements of earnings, income or cash flows, ADM said.
For years, ADM has said in regulatory filings that sales between business segments were recorded at amounts “approximating market” value, according to a Reuters review of SEC filings.
At an event in San Francisco on Wednesday, an official with the US attorney’s office for the Southern District of New York said his office intends to bring more accounting cases against publicly traded companies.
“These are important cases for us,” said Scott Hartman, co-chief of the office’s securities and commodities fraud unit. REUTERS
