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The US Securities and Exchange Commission (SEC) has reached an agreement with Ahold NV following a multimillion dollar accounting scandal that took place more than a year and a half ago but continues to roil the waters around the company.

The agreement, according to various reports, will not assess any financial penalties against the company or any of the executives that were forced to resign in the wake of the scandal.

The company will not have to pay any fines related to past offenses, but has agreed to injunctions against future violations. Similarly, former CEO Cees van der Hoeven and former CFO Michiel Meurs were not fined; however, this lack of penalty reportedly came at the request of prosecutors in the Netherlands, who are conducting their own investigation.

The Wall Street Journal reports this morning that van der Hoeven is telling reporters that he will not be required to admit or deny guilt as part of the agreement, and that his deal will require him to concede negligence but not “willful wrongdoing.”

Also coming to a deal with SEC is Roland Fahlin, a former member of Ahold’s audit committee. Details of the Meurs and Fahlin agreements were not available.

While Ahold and its former executives may be resolving their problems in the US, the executives still face charges of fraud in the Netherlands.

Ahold already has agreed to pay $9.9 million (US) to avoid criminal prosecution in the Netherlands.

The New York Times this morning reports that “the SEC contended that Ahold overstated its sales by $30 billion over three years. Earnings at its U.S. Foodservice subsidiary, a focal point of the suspected fraud, were inflated by more than $800 million.”

Thomas C. Newkirk, an associate director at the SEC, told the NYT, “We are trying to get away from hyperbole when we describe frauds, but this was massive.”
KC's View:
We’re curious how the top executive at a company the size of Ahold can be negligent without being willful…especially because, in our dealings with van der Hoeven, it was our impression that he was one of the more willful executives we’ve ever met.

The WSJ reports this morning that van der Hoeven's attorney has accused the Dutch prosecutors of intentionally failing “to do justice to our client's rights,” and of conducting a probe that is “one-sided and incomplete.”

How about the rights of the investors who lost money because of these executives’ actions? Or the employees who have lost jobs or hours because of these issues?

If arrogance were a crime, these former executives would be doing life.