Ethics: Blinded By Pressure

When:  Jun 22, 2019 from 09:30 AM to 12:00 PM (PT)

This case examines an interesting real-life occurrence of alleged financial statement fraud by Diamond Foods, Inc. Specifically, the company purportedly understated walnut costs in two fiscal years in order to falsify earnings to meet estimates by stock analysts. The facts of this case are drawn from Securities & Exchange Commission (SEC) accounting and auditing enforcement releases and administrative proceedings releases.

The SEC filed separate actions in January 2014 against Diamond Foods, Inc., its former Chief Executive Officer Michael Mendes, and its former Chief Financial Officer Steven Neil for their roles in a scheme to understate walnut costs in order to falsify earnings to meet estimates by stock analysts.1 The SEC contends that Diamond materially falsified its financial statements in fiscal years 2010 and 2011.2 Diamond has since restated its financial results for those periods. The company’s reported earnings decreased by $10.5 million for its 2010 fiscal year and by $23.6 million for its 2011 fiscal year.3 Additional specific information is provided in the following sections of the case.

Cost:  $25.00 (check made out to "IMA" or cash)

Food:  Continental Breakfast included in the cost

Dress Code: Casual

Location

ConXtech, Inc. Headquarters
6701 Koll Center Parkway
Suite 150
Pleasanton, CA 94566

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