The Hain Celestial Group ($HAIN) Investor Settlement
The Hain Celestial Group has reached a tentative settlement to resolve investor claims that it used undisclosed quarter-end sales concessions, improper revenue recognition, and weak internal controls to mask weakening demand.
Outline:
Starting in 2014, Hain allegedly pushed excess inventory to major distributors through discounts, extended terms, rights of return, and spoilage coverage. On January 21, 2016, accounting concerns began surfacing after the resignation of the company’s chief accounting officer. On August 15, 2016, Hain disclosed distributor concessions and a filing delay, and $HAIN fell 26.3%. On February 10, 2017, Hain said prior financial information could no longer be relied upon, disclosed an SEC investigation, and the case has now moved to a tentative settlement.
Timeline:
January 21, 2016: Hain disclosed the resignation of its vice president-finance and chief accounting officer.
January 25, 2016: $HAIN closed down more than 7% after the resignation disclosure.
August 15, 2016: Hain announced a delay in releasing its fourth-quarter and fiscal 2016 results. $HAIN fell 26.3% after that disclosure.
February 10, 2017: Hain said previously issued financial information could no longer be relied upon and disclosed an SEC formal order of investigation and subpoena.
February 13, 2017: $HAIN fell more than 8% after the broader disclosure
Background:
Hain was a major seller of organic and natural food and personal care products. As competition in natural and organic foods intensified, investors say demand for Hain’s products weakened and the company struggled to keep up the growth it had long reported.
Hain responded by pushing excess inventory to major distributors at the end of quarters. Investors say those shipments were supported by undisclosed incentives such as cash payments, steep discounts, extended payment terms, rights of return, and reimbursement if perishable products spoiled before being sold.
The dispute also centers on how those transactions were recorded. Investors claim Hain recognized revenue too early, mishandled trade and promotional accruals, and failed to maintain adequate documentation and internal controls around the side deals and concessions.
The alleged scheme began to unravel when distributors stopped taking so much excess inventory and Hain could no longer sustain the practice. In August 2016, the company disclosed that it had identified distributor concessions and delayed its annual filing while reviewing the accounting impact.
The fallout continued into 2017, when Hain said earlier financial information could no longer be relied upon, disclosed an SEC investigation, and later restated prior periods while acknowledging material weaknesses in internal controls. The matter has now moved to a tentative settlement.
What Can Investors Expect Now?
The Hain Celestial Group has reached a tentative settlement to resolve investor claims that it used undisclosed quarter-end sales concessions, improper revenue recognition, and weak internal controls to mask weakening demand.
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.
Frequently Asked Questions
All persons and entities who or which purchased or otherwise acquired the publicly traded common stock of Hain, and/or exchange-traded call and/or put options on such publicly traded common stock during the period from November 5, 2013 through February 10, 2017, both dates inclusive, and where allegedly damaged thereby.
No, if you have purchased securities within the class period, you are eligible to participate.
You can participate in the settlement and retain (or sell) your securities.
The entire process usually takes 4 to 9 months after the claim deadline. But the exact timing depends on the court and settlement administration.
If you're eligible, you can file your claim directly from this case page by clicking the "Collect Payout" button.
More than 100 companies are currently paying out settlements. Connect your brokerage account to automatically check which ones you may have missed — or file manually for this case.
11th.com is an investor recovery company that helps investors track and collect securities class action settlements. We will:
1. Prepare documents for your payout.
2. Audit the claim and make sure you get the maximum possible payout.
3. File a claim with the settlement administration.
4. Correspond with the settlement administration to resolve emerging issues.
5. Deliver payout directly to your brokerage account.
There is no upfront cost, but we will deduct 20% of the recovered amount as a commission for our services.