U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20176 / June 29, 2007
Accounting and Auditing Release No. 2629 / June 29, 2007
Securities and Exchange Commission v. James P. O'Donnell, Jay D. Bolding and Debra L. Keith, United States District Court for the District of Colorado, Civil Action No. 07-CV-01373 RPM-MJW (D.C. Colo. June 29, 2007); Securities and Exchange Commission v. Kenneth W. DiFonzo, United States District Court for the District of Colorado, Civil Action No. 07-CV-01374 WDM-MEH (D.C. Colo. June 29, 2007); Securities and Exchange Commission v. Dwight J. Goslee and Harry J. Hill, United States District Court for the District of Colorado, Civil Action No. 07-CV-01377 REB-MEH (D.C. Colo. June 29, 2007)
SEC BRINGS SETTLED ACTIONS INVOLVING FINANCIAL DISCLOSURE AGAINST FORMER CONAGRA FOODS, INC. CORPORATE EXECUTIVES; RELIEF INCLUDES OVER $1.7 MILLION IN CIVIL PENALTIES, DISGORGEMENT AND PREJUDGMENT INTEREST.
The Commission today filed settled civil actions in the United States District Court for Colorado against the following former executives of ConAgra Foods, Inc., (ConAgra): the former Chief Financial Officer, James O'Donnell (O'Donnell), two former Corporate Controllers, Jay Bolding (Bolding) and Kenneth DiFonzo (DiFonzo), and the former Vice President for Taxes, Debra Keith. The Commission also instituted settled administrative proceedings and filed settled penalty actions against Dwight Goslee (Goslee), the former Executive Vice President of Operations and Control and Harry Hill (Hill), the former Director of Corporate Accounting. These enforcement actions variously address alleged improper accounting practices, inaccurate disclosure and income tax errors occurring between ConAgra's fiscal years 1999 and 2005 that resulted in ConAgra materially misstating its financial performance in its public statements and periodic filings with the Commission.
According to the allegations set forth in the Commission's Complaints:
O'Donnell, Bolding, and DiFonzo, without admitting or denying the allegations in the complaints, have each consented to the entry of final judgments that enjoin them from violating and/or aiding and abetting violations of certain reporting, books and records, and internal controls provisions of the federal securities laws. Specifically, O'Donnell, Bolding and DiFonzo have consented to final judgments that will enjoin them from violating and/or aiding and abetting violations of Exchange Act Rule 13b2-1, and Exchange Act Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) and Rules 12b-20, 13a-1 and 13a-13. Similarly, Keith, without admitting or denying the Commission's allegations, has consented to the entry of a final judgment that enjoins her from violating and/or aiding and abetting violations of these same provisions, with the exception of Exchange Act Rule 13a-13. O'Donnell has agreed to pay disgorgement in the amount of $425,531, to pay prejudgment interest thereon of $174,151, to divest 17,648 unexercised ConAgra stock options, and to pay a civil penalty of $100,000. Bolding has agreed to pay disgorgement of $345,790, prejudgment interest of $129,816, and a $125,000 civil penalty. DiFonzo has agreed to pay $139,988 in disgorgement and $65,590 in prejudgment interest, and to divest 20,192 unexercised ConAgra stock options. Keith has agreed to disgorge $132,456 and the monetary value of 2872 shares of ConAgra stock, to pay $19,225 in prejudgment interest, to divest 866 unexercised ConAgra stock options, and to pay a civil penalty of $60,000. The settlement terms for all the parties are subject to court approval.
As part of these settlements, and following the entry of proposed final judgments against them, Bolding and DiFonzo, without admitting or denying the Commission's findings, have each consented to the issuance of administrative orders, pursuant to Rule 102(e)(3) of the Commission's Rules of Practice, suspending them from appearing or practicing before the Commission as accountants with leave to apply for reinstatement after one year.
Additionally, in an administrative cease-and-desist proceeding, Goslee and Hill, without admitting or denying the Commission's findings, have consented to the issuance of Orders finding that each committed violations of Exchange Act Rule 13b2-1 and caused violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Exchange Act Rules 12b-20 and 13a-13, and additionally as to Hill, Exchange Act Rule 13a-1. In a separate civil action, Goslee also has agreed to pay a $45,000 civil penalty and Hill has agreed to pay disgorgement of $10,463, plus $4,756 of prejudgment interest, and a $20,000 civil penalty.
For further information, see Litigation Release No. 19969 (January 17, 2007).