This story was originally published on CFO Dive. To receive daily news and insights, subscribe to our free daily CFO Dive newsletter. In a one-two punch this week, the Securities and Exchange Commission finally showed its cards with regard to the scandal around intersegment sales accounting practices that has hung over Archer-Daniels-Midland for two years.  The SEC on Tuesday announced settled accounting and disclosure fraud charges against the Chicago-based grain trader giant and two former executives — ...

Archer Daniels Midland Co. (ADM) is back in the headlines for all the wrong reasons. In the 1990s, the agricultural giant was implicated in a price-fixing conspiracy that became the basis for the book—and later Matt Damon movie—The Informant!. Now the company’s latest controversy centers around accounting in the company’s nutrition unit. After an investigation lasting almost three years, ADM has reached a $40 million civil penalty settlement with the SEC, without admitting or denying wrongdoing, over ci ...

Bloomberg Archer-Daniels-Midland Co. agreed to pay $40 million to settle a two-year federal investigation into the crop giant’s accounting practices that rocked its share price and eroded faith in the company’s transparency. The civil penalty levied by the US Securities and Exchange Commission settles allegations that ADM and former executives engaged in accounting and disclosure fraud when they sought to boost the bottom line of ADM’s flailing nutrition business unit to meet the Chicago-based company’s ...

The settlement, along with the company’s efforts to improve and remediate its reporting processes, pave the way for ADM to move out from under the accounting cloud, according to Seth Goldstein, a Morningstar analyst. “To me, once you’re in the phase of settling with regulators that means the light’s at the end of the tunnel and you’re ready to move forward,” Goldstein said in an interview.The suit landed on the same day that the SEC announced that the Chicago-based grain trading giant agreed to pay a $40 mi ...

Group 1: Michael Burry's Investment Strategy - Michael Burry is betting against AI stocks, specifically Nvidia (NVDA) and Palantir (PLTR), by purchasing put options in Q3 2025 [1] - Burry has suggested he closed his short position on Palantir, indicating a strategic shift in his investment approach [1] Group 2: Allegations Against Hyperscalers - Burry accuses hyperscalers of accounting fraud by understating depreciation, which he claims artificially boosts earnings [2] - He estimates that hyperscalers will understate depreciation by $176 billion from 2026 to 2028, with Oracle (ORCL) and Meta Platforms (META) overstating earnings by 26.9% and 20.8% respectively by 2028 [2] - Burry highlights that Alphabet (GOOG) has doubled the useful life of its network/compute assets to six years since 2020, allowing for a longer depreciation period and boosting near-term earnings [3] Group 3: Financial Implications for Hyperscalers - Hyperscalers are facing significant depreciation costs due to investments in AI infrastructure, which will impact their income statements [4] - The effect of higher depreciation is already evident in earnings, as profits are not growing as significantly relative to revenue compared to the previous two years [4] - Burry plans to release more details on his allegations on November 25, which may provoke responses from the companies involved [4]

Core Viewpoint - Michael Burry accuses major technology companies of using aggressive accounting practices to inflate profits from the AI boom, specifically by understating depreciation expenses [2][3][4] Group 1: Accounting Practices - Burry claims that "hyperscalers" are artificially extending the useful life of chips, leading to understated depreciation expenses [2][3] - This accounting maneuver could result in an estimated $176 billion understatement of depreciation from 2026 to 2028, inflating reported earnings across the industry [3] - Companies like Oracle and Meta Platforms could see their profits overstated by approximately 27% and 21%, respectively, by 2028 due to these practices [3] Group 2: Market Reactions - Burry has recently taken significant short positions against AI companies, including $187 million in put options against Nvidia and $912 million against Palantir Technologies [7] - Following Burry's disclosures, shares of Nvidia and Palantir experienced notable fluctuations, with Nvidia rebounding nearly 6% and Palantir rising almost 9% after previous declines [8] Group 3: Industry Context - Burry draws parallels between the current AI enthusiasm and the late-1990s tech bubble, suggesting potential overvaluation in the sector [6]

Core Viewpoint - A complaint has been filed against Compass Group Diversified Holdings, LLC due to alleged irregularities in its subsidiary Lugano Holdings, Inc.'s accounting practices, leading to significant financial implications for the company and its investors [1][2][3]. Company Overview - Compass Group Diversified Holdings, LLC is an investment holding company with a subsidiary, Lugano Holdings, Inc., which operates in the jewelry sector [1]. - The company announced an investigation into Lugano, which identified "preliminarily irregularities" in accounting and inventory practices [2]. Financial Impact - Following the announcement of the investigation and the resignation of Lugano's CEO, Compass's share price plummeted by 62%, dropping from $17.25 to $6.55 per share [3]. - The Audit Committee of Compass concluded that the financial statements for 2024 should no longer be relied upon, indicating potential inaccuracies in reported financial data [2][3]. Legal Proceedings - Investors who purchased Compass stock between February 24, 2022, and May 7, 2025, are encouraged to seek appointment as lead plaintiff in a class action lawsuit against the company [1][4]. - The deadline for investors to submit a motion to be appointed as lead plaintiff is July 8, 2025 [5]. Law Firm Background - Barrack, Rodos & Bacine, the law firm handling the case, has extensive experience in prosecuting securities law class actions, including significant recoveries in past cases [6].

Core Viewpoint - Abacus Global Management, Inc. is facing significant scrutiny and a decline in share price due to allegations of improper accounting practices, as detailed in two critical reports from Morpheus Research within a week [1][3][5]. Group 1: Allegations and Reports - Morpheus Research published an initial report on June 4, 2025, alleging that Abacus engaged in an "accounting scheme" by using "mark-to-model" accounting and underestimating life expectancies, leading to the creation of "fake revenue" [3][4]. - The second report from Morpheus, released on June 12, 2025, escalated the allegations by presenting new evidence of undisclosed related-party dealings and questioning the independence of the actuarial firm Lewis & Ellis, which Abacus claimed had vetted its asset valuations [5][6]. Group 2: Market Reaction - Following the initial Morpheus report, Abacus's shares experienced a decline of over 20% in a single trading day [4]. - The ongoing investigations and negative reports have led to a continued sharp decline in Abacus's share price, raising concerns among investors [6]. Group 3: Company Response - In response to the allegations, Abacus published a rebuttal on June 10, 2025, asserting that it had retained Lewis & Ellis to validate its balance sheet, claiming the firm has a "sterling reputation" [4]. - However, Morpheus's follow-up report indicated that Abacus's rebuttal was inadequate and contradicted its own SEC filings, further intensifying scrutiny on the company's financial practices [5].

Core Points - A class action lawsuit has been filed against Compass Group Diversified Holdings, LLC (NYSE: CODI) for investors who purchased stock between May 1, 2024, and May 7, 2025 [1] - An investigation into Lugano Holdings, a subsidiary of Compass, revealed irregularities in accounting and inventory practices, leading to the conclusion that previously issued financial statements for 2024 should not be relied upon [2] - Following the announcement of the investigation, Compass's share price dropped by 62%, from $17.25 to $6.55 per share [3] Company Specifics - The resignation of Lugano's founder and CEO, Moti Ferder, was announced, effective immediately, with no severance compensation [3] - The lawsuit alleges that Compass failed to maintain adequate internal controls over its financial statements, making them unreliable and misleading [3] Legal and Investor Actions - Investors who purchased Compass stock during the class period and incurred losses are encouraged to contact the law firm for potential participation in the class action lawsuit [4] - The deadline for investors to submit a motion to be appointed as lead plaintiff is July 8, 2025 [5] Law Firm Background - Barrack, Rodos & Bacine has extensive experience in prosecuting securities law class actions, achieving significant recoveries in past cases [6]