A US pasta company boss has paid $1m (£550,000) to settle allegations that he and and his CFO engaged in fraudulent accounting.

The SEC said the company, American Italian Pasta Company, and its former execs had fraudulently capitalised
period costs, manipulated AIPC’s trade promotion accounting, failed to write off obsolete or missing spare parts, structured fraudulent round-tripping of cash transactions and recorded false receivables.

Former chief exec Timothy S Webster agreed to pay more than $1m to settle the charges, while the company itself paid a $7.5m penalty.

The fraudulent accounting, and other errors arising from inadequate internal controls, resulted in the overstatement of AIPC’s pre-tax income for the relevant period by approximately $59 million, or 66%, the SEC said.

'This is another case where executives at the highest levels of a public company sought to meet Wall Street’s earnings expectations at all costs,' said George B. Curtis, deputy director of the SEC’s division of enforcement.

Further Reading:

Read the SEC's statement