Royal Ahold scandal investigation deepens
Apr 14, 2003 12:00 PM, from staff and wire reportsThe law firm Wolf Haldenstein Adler Freeman & Herz has launched an additional investigation into Royal Ahold because of reports that Sara Lee Corp has suspended three employees who provided US Foodservice auditors with inaccurate information about the size of its vendor discounts.
These discounts may have contributed to an accounting scandal that caused Ahold, a Netherlands-based supermarket and foodservice operator, to overstate earnings by at least $500 million.
How US Foodservice accounted for vendor allowances is at the heart of investigations by the Securities and Exchange Commission and the Justice Department. Ahold said in February that it overstated 2001 and 2002 earnings by at least $500 million, sending the company’s stock plunging and resulting in the ouster of its two top executives.
Wolf Haldenstein previously filed a federal securities class action complaint in the United States District Court for the Southern District of New York against Ahold, certain of its officers and directors, and its accountant, Deloitte Touche Tohmatsu.
The complaint was filed on behalf of those who purchased Ahold securities between May 15, 2001, and Feb 21, 2003. It alleges that defendants violated federal securities laws by issuing materially false and misleading statements throughout the class period that artificially inflated the market price of the company’s securities.