Dutch retailer Royal Ahold NV has ended a 20-month investigation into accounting fraud by reaching a settlement with the Securities and Exchange Commission that avoids a fine.
The SEC said it decided not to fine Ahold because of its “exceptional” cooperation with the probe, Bloomberg reported.
“Cooperation pays,” said Thomas Newkirk, an SEC enforcement official. “They waived the attorney-client privilege, and made witnesses available who were overseas, where it would have been very time- consuming and expensive for us otherwise.” Ahold remains subject to stiffer penalties for any future U.S. violations.
Ahold announced early last year that it overstated profits by least half a billion dollars at its U.S. Foodservice subsidiary. Chief Executive Officer Cees van der Hoeven and former Chief Financial Officer Michiel Meurs were ousted and the company's stock plummeted. Since then, its stock has gained 82 percent.
Van der Hoeven and Meurs also were barred from serving on the boards of public companies. They and the company neither admitted nor denied the SEC's allegations.
Ahold, which owns Stop & Shop and Giant supermarkets, last month settled a separate investigation by the Dutch public prosecutor after admitting to improperly consolidating joint ventures. The retailer agreed to pay a fine of $10 million.
The SEC will continue investigating former Ahold board member Jan Andreae. Andreae allegedly “knowingly or recklessly” concealed matters of control surrounding Swedish joint venture ICA AB, the SEC said.