ADM shareholder sues company, execs for fraud

By Jody Godoy

(Reuters) - A shareholder of Archer-Daniels-Midland has sued the commodities trader in U.S. federal court, days after the company's stock plunged 24% on news that a securities regulator was investigating accounting practices in its nutrition segment.

Raymond Chow, an individual investor, said in the proposed class action lawsuit filed in Chicago on Wednesday that ADM lied about the profitability of its nutrition segment, which supplies food and beverage manufacturers.

An ADM spokesperson declined to comment on the lawsuit on Thursday.

On Monday ADM stock tumbled 24% after the company placed CFO Vikram Luthar on administrative leave. Chow is seeking damages for investors who bought ADM between April 30, 2020 and that date.

The lawsuit alleges that executive stock awards tied to the performance of the nutrition segment incentivized Luther, ADM President Juan Luciano and former CFO Ray Young to make false statements to investors.

The shareholder lawsuit came less than a week after ADM said it was investigating accounting practices in its nutrition segment after a voluntary document request from the U.S. Securities and Exchange Commission. ADM has said it is cooperating with the regulator.

The company said on Sunday that it would delay releasing fourth-quarter results and its annual report, and cut its adjusted earnings forecast to "above $6.90" per share for 2023 from an "excess of $7 a share" view earlier.

ADM has invested billions of dollars over the past decade in Nutrition, the smallest yet fastest growing of its three main business units, starting with its $3 billion acquisition of WILD Flavors in 2014. In that time, annual adjusted earnings per share swelled from $2 to $3 a share to a record $7.85 in 2022.

(Reporting by Jody Godoy in New York; Editing by David Gregorio)