Diageo Settles With SEC For $5 Million In Overshipping CaseFebruary 20, 2020
Diageo has agreed to pay a $5 million penalty related to SEC charges that the company overshipped to distributors in its 2014 and 2015 fiscal years.
The SEC alleges that Diageo North America pushed excess sales onto its distribution partners in order to boost earnings reports and counteract flagging market conditions. The effort focused heavily on new innovation products, the SEC claims, quoting Diageo emails.
The alleged misconduct stems from the company’s failure to account for the excess shipments as a known trend or uncertainty on its balance sheet that would lead to future destocking and lower sales, making the earnings reports “materially misleading,” according to the SEC. While it will pay the penalty, Diageo is not required either to admit or deny the conduct in question.—Danny SullivanSubscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.
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