Securities and Exchange Commission v. NutraCea, et al., United States District Court, District of Arizona, Civil Action No. CV 11-0092-PHX-DGC
The Securities and Exchange Commission charged three former executives and two former accounting personnel at NutraCea for booking fraudulent sales revenue higher than the actual sales. NutraCea allegedly inflated the sales revenue recognition in fiscal year 2007 by recording a fraudulent product sales revenue of $2.6 million to Bi-Coastal Pharmaceutical Corp. Also, the complaint against NutraCea includes improper record of revenue on a bill of $1.9 million sales of product to ITV Global, Inc. In year 2007, the improper product sales revenue recorded from these two companies show NutraCea overstated its sales revenue by 36.8%, which resulted in a misstating of the operating loss by over 89%. …show more content…
NutraCea’s Chief Executive Officer assured Bi-Coastal’s president that he will not have to take possession of these products and at a later date the products will be sold to third parties. To support the recognition of the sales with a down payment from Bi-Coastal, NutraCea’s Chief Executive Officer asked former NutraCea’s Chief Operating Officer to lend $1 million to Bi-Coastal, while he asked Bi-Coastal’s president to falsely report a higher net worth on the financial statements for Bi-Coastal’s owners to prove their ability to pay for the balance due of $1.6
The Securities and Exchange Commission charged three former executives and two former accounting personnel at NutraCea for booking fraudulent sales revenue higher than the actual sales. NutraCea allegedly inflated the sales revenue recognition in fiscal year 2007 by recording a fraudulent product sales revenue of $2.6 million to Bi-Coastal Pharmaceutical Corp. Also, the complaint against NutraCea includes improper record of revenue on a bill of $1.9 million sales of product to ITV Global, Inc. In year 2007, the improper product sales revenue recorded from these two companies show NutraCea overstated its sales revenue by 36.8%, which resulted in a misstating of the operating loss by over 89%. …show more content…
NutraCea’s Chief Executive Officer assured Bi-Coastal’s president that he will not have to take possession of these products and at a later date the products will be sold to third parties. To support the recognition of the sales with a down payment from Bi-Coastal, NutraCea’s Chief Executive Officer asked former NutraCea’s Chief Operating Officer to lend $1 million to Bi-Coastal, while he asked Bi-Coastal’s president to falsely report a higher net worth on the financial statements for Bi-Coastal’s owners to prove their ability to pay for the balance due of $1.6