Newell Brands ($NWL) $12.5M Fair Fund

Newell Brands ($NWL) has agreed to pay $12.5M through the SEC Fair Fund to investors, resolving claims that the company and its former CEO misled the public about key financial metrics in 2016 and 2017.

Between late 2016 and 2017, Newell inflated its reported sales growth and working capital results, giving investors a misleading picture of its financial performance. The SEC later charged the company and former CEO Michael B. Polk with securities law violations.

Timeline:

• Between late 2016 and 2017: Investors purchased Newell stock based on positive financial updates from the company.

• On November 2, 2017: Newell reported disappointing earnings that contradicted earlier optimistic figures. Following this $NWL fell 25%.

• In June 2023: The SEC announced a $12.6 million settlement with Newell and its former CEO.

• January 2026: Investors Can Still File Late Claims in Newell Brands Settlement

When Newell Brands Inc. ($NWL) merged with Jarden Corporation, it promised investors a consumer-goods powerhouse capable of sustained, high-level performance. This new entity, the parent of household staples like Rubbermaid and Sharpie, leaned heavily on its "core sales growth" to prove the integration was a success. Management assured that these non-GAAP metrics provided a "more complete understanding of underlying sales trends".

At that time, Newell Brands Inc. emphasized that its results were "strong" or "solid" and in line with analyst estimates. Executives portrayed the company as meeting its growth targets through organic demand and operational efficiency. These metrics were presented as the same tools management used to evaluate internal performance, suggesting a transparent window into the firm's health.

During this period, the company said that they "may be unable to successfully integrate the businesses" or realize anticipated benefits due to cultural or management differences. However, these disclosures remained silent on the specific internal pressures mounting.

In the end, the reality was far messier: Newell Brands failed to disclose that it was using accounting maneuvers and "pull-forward" practices to mask disappointing sales. The truth was that under the direction of former CEO Michael B. Polk, the company accelerated future orders into current quarters and "scrubbed" accruals to hit targets the business was actually missing.

The facade finally stopped on November 2, 2017, when the company announced third-quarter results that were significantly below expectations. This revelation caused an immediate and sharp 25% drop in the stock price, wiping out massive amounts of shareholder value.

Finally, on September 29, 2023, the SEC established cease-and-desist proceedings, finding that Newell Brands had violated multiple antifraud and reporting provisions. The investigation revealed that for six quarters, the company's publicly announced growth rates were artificially inflated and unrelated to actual sales.

As a result, Newell Brands Inc. and Michael B. Polk were ordered to pay a combined $12,610,000 in civil penalties to compensate harmed investors.

Newell Brands ($NWL) has agreed to pay $12.5M through the SEC Fair Fund to investors, resolving claims that the company and its former CEO misled the public about key financial metrics in 2016 and 2017.

If you were damaged due to this situation, you can file for a payout and get your share of the settlement. You can check if you are eligible and other details in the FAQ section below.