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Krispy Kreme troubles likely not over
March 15, 2009
Earlier this month Krispy Kreme Doughnuts Inc. announced that the U.S. Securities and Exchange Commission approved an agreement to resolve the commission's investigation of the company that began in 2004. But, as the Winston-Salem Journal reports, the company's future is not immediately bright.
Under the terms of the agreement, the company consented to a Commission Order Instituting Cease and Desist Proceedings, Making Findings, and Imposing a Cease and Desist Order Pursuant to Section 21C of the Securities Exchange Act of 1934, according to a press release.
In particular, the company consented to a cease and desist order against future violations of provisions of the Exchange Act and related rules concerning filing of accurate annual, quarterly and current reports with the commission, the maintenance of accurate books, records, and accounts in reasonable detail, and the maintenance of a sufficient system of internal accounting controls. The company did not admit or deny any findings in the order, and the order does not include any monetary payments or other sanctions.
"We are pleased that the SEC investigation has concluded on satisfactory terms, with no monetary penalty against the company," said Darryl R. Marsch, senior vice president and general counsel for Krispy Kreme. "Today, we can finally close the book on this investigation into the events that occurred under former Krispy Kreme management."
Former execs fined
However, the company's troubles aren't clearly over, according to the Winston-Salem Journal. Analysts say there is no guarantee that the company will recover anytime soon from the problems of former management and failed expansion on a national scale. And after the SEC ordered former top executives Scott Livengood, John Tate and Randy Casstevens to pay a combined $783,000 for violating accounting laws and for fraud, several analysts also project that more civil lawsuits against the company will follow.
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