NEW YORK, Jan. 26, 2024 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a securities class action lawsuit has been filed in the United States District Court for the Northern District of Illinois on behalf of all persons or entities who purchased or otherwise acquired Archer-Daniels-Midland Company (“ADM” or the “Company”) (NYSE: ADM) securities between April 30, 2020 and January 22, 2024, inclusive (the “Class Period”).
The Complaint alleges that Defendants made false and/or misleading statements, as well as failed to disclose material facts, about the performance and prospects of ADM’s Nutrition segment and its accounting practices. Specifically, Defendants made positive statements about the Nutrition segment as a future profit-driver for the Company with the ability to capitalize on healthier eating trends and rising consumer demand for natural ingredients and flavoring. Defendants also created the impression that the Nutrition segment’s growth would provide more diversification and earnings stability for ADM.
Unbeknownst to investors, however, the Nutrition segment’s ostensibly impressive growth was inaccurate and subject to improper accounting practices, and Defendants also downplayed the segment’s eventual decline in 2023. As ADM was aggressively acquiring companies to expand its capabilities in Nutrition, investors were under the impression that the segment was growing rapidly. As alleged, Defendants’ accounting practices for the segment misrepresented its true financial results and prospects, including its operating profits (“OP”). During the Class Period, Defendants were incentivized to create the appearance of a diversified business by inflating the performance of the Nutrition segment, and Defendants were further incentivized by stock awards that were directly tied to the performance of the Nutrition segment from 2020 to 2022. As a result, ADM’s business and prospects were much worse than represented by Defendants, causing the price of ADM common stock to trade at artificially inflated levels during the Class Period.
On January 21, 2024, ADM announced that it had placed its CFO Vikram Luther on leave effective immediately. The Company said that Luther’s “leave is pending an ongoing investigation being conducted by outside counsel for ADM and the Board’s Audit Committee regarding certain accounting practices and procedures with respect to ADM’s Nutrition segment, including as related to certain intersegment transactions.” The Company also revealed that its investigation was initiated in response to its receipt of a voluntary document request by the SEC. As a result, ADM delayed its Q4 and FY 2023 earnings release and withdrew its outlook for the Nutrition segment.
On this news, the price of ADM common stock declined by $16.23 per share, or approximately 24%, from $68.19 per share to close at $51.69 on January 22, 2024, wiping out approximately $8.8 billion of ADM's market value.
Investors who purchased or otherwise acquired shares of ADM should contact the Firm prior to the March 25, 2024 lead plaintiff motion deadline. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com.
Please visit our website at http://www.gme-law.com for more information about the firm.
