A class action lawsuit was filed against Archer-Daniels-Midland Company (NYSE:ADM) on January 24, 2024. The plaintiffs (shareholders) alleged that they bought ADM stock at artificially inflated prices between April 30, 2020 and January 22, 2024 (Class Period) and are now seeking compensation for their financial losses. Investors who bought ADM stock during that period can learn about joining the lawsuit here: https://zlk.com/pslra-1/archer-daniels-midland-company-lawsuit-submission-form?wire=16.
Archer-Daniels-Midland is a global food processing and nutrition company. The plaintiffs maintain that the company and three of its current and/or former senior officers deceived investors by repeatedly lying and withholding vital information about ADM’s Nutrition division’s performance and prospects during the Class Period.
The truth was revealed on January 21, 2024, when ADM placed its CFO on leave, citing 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.”
Moreover, the company delayed the release of its Q4 and the full-year Fiscal 2023 results and withdrew the guidance for the Nutrition segment.
Interestingly, during the Class Period, the defendants constantly reiterated the Nutrition segment’s solid performance, demand, and growth prospects in the earnings calls. The defendants even claimed that the segment could achieve 25% to 30% of the total profits going forward, based on the continued business momentum.
As per the class action lawsuit, Archer-Daniels-Midland caused ADM stock to trade at artificially inflated prices by knowingly and recklessly omitting truthful information about its business performance.
Notably, on January 22, ADM stock sank 24.2% on news of the CFO’s leave, causing massive damage to shareholders’ returns.
