SEC Charges Newell Brands and Former CEO With Misleading Investors

By Will Feuer

The Securities and Exchange Commission charged Sharpie and Yankee Candle maker Newell Brands as well as its former chief executive officer for misleading investors over financial-accounting practices.

Newell has agreed to pay $12.5 million in civil penalties to settle the charges. Michael Polk, who was CEO of Newell from 2011 to 2019, agreed to pay $110,000. Neither admitted or denied the alleged violations.

The Wall Street Journal reported in 2020 that the SEC was investigating sales and accounting practices at the consumer-products maker.

In 2016 and 2017, Newell and Polk boosted the company's publicly disclosed core sales growth in ways that were out of step with Newell's actual but undisclosed sales trends, the SEC said. The agency said Newell announced "strong" or "solid" results in quarters it internally described as disappointing due to shortfalls in sales.

Newell pulled sales forward into earlier quarters without adequate disclosure and engaged in accounting practices that were inconsistent with Generally Accepted Accounting Principles, according to the SEC.

"Today's order finds that Newell's former CEO issued an instruction to 'scrub' the company's accruals after he learned that the company was projecting a 'massive' and 'disappointing' miss for the quarter," said Mark Cave, associate director of the SEC's division of enforcement.

Polk and Newell didn't immediately respond to requests for comment.

Write to Will Feuer at Will.Feuer@wsj.com

(END) Dow Jones Newswires

September 29, 2023 09:06 ET (13:06 GMT)

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