The Hain Celestial Group ($HAIN) Investor Settlement

The parties have reached an agreement to settle the case, but the terms are still being finalized. You can submit your application now, and it will be processed once claims filing opens.

E.D. New York

Court

2:16-cv-04581

Case number

11/05/2013

Class period Start

02/10/2017

Class period End

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.

Case Type

US Securities Class Action

Case Status

Tentative Settlement

Alleged Offence

Misleading Statements,

Financial Misrepresentation,

Fraud,

Failure to Disclose,

Insider Trading,

Omissions

Suspected Party

Directors,

Management

Security Type

Stocks

Trade Direction

Long

Filing date

08/17/2016

Plaintiffs

Rosewood Funeral Home and Salamon Gimpel

Attorneys

Labaton Sucharow LLP

Defendants

Irwin D. Simon ; Pasquale Conte ; Stephen J. Smith ; John Carroll

Trades matching type

FIFO

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