Lamb Weston Misled Investors About Software Transition, SEC Alleges
Two Executives Violated Federal Securities Laws, Agency Says
Shares of French Fry Company Plunge After Downbeat Quarter and Year-Ahead Outlook
Lamb Weston Holdings Inc. misled investors about its transition to a new software system meant to streamline inventory orders, the Securities and Exchange Commission (SEC) alleged in a complaint filed Tuesday. The agency also accused two senior executives of violating federal securities laws during the frozen potato giant's implementation of the system.
Shares of Lamb Weston plunged to multiyear lows today after the company reported a downbeat quarter and year-ahead outlook. The company primarily sells French fries to other businesses like quick service restaurants. Despite its niche focus, Lamb Weston is a major player in the frozen potato industry.
The SEC's complaint alleges that Lamb Weston and the two executives, former CEO Tom Werner and former CFO Brad Lukas, misled investors about the company's progress in transitioning to the new software system. The agency says that the company failed to disclose that the transition was causing significant problems, including delays in orders and lost sales.
As a result of the alleged misconduct, Lamb Weston's stock price fell sharply, causing investors to lose millions of dollars. The SEC is seeking a permanent injunction against Lamb Weston and the two executives, as well as civil penalties and other relief.
Lamb Weston did not immediately respond to a request for comment. The company has previously said that it is cooperating with the SEC's investigation.
Comments