ADM fined $40 million as accounting fraud investigation ends

Archer Daniels Midland (ADM) has agreed to pay $40 million to settle US Securities and Exchange Commission charges that senior executives artificially inflated the performance of the company's Nutrition business through improper accounting maneuvers. The settlement, announced January 27, 2026, comes as the Department of Justice dropped a sprawling criminal investigation that had included grand jury testimony from more than three dozen current and former employees, according to a Reuters investigation.

Background and Context

ADM, one of the world's largest agricultural commodity processors, processes grains like soybeans and corn into ingredients found in everything from toothpaste to Coca-Cola. Facing volatile commodity markets that can dramatically affect its bottom line—as evidenced by the company's layoff of hundreds of employees in early 2025 due to dropping prices—ADM sought to grow its more stable food processing business. After acquiring a European flavor company in 2014, ADM established Nutrition as one of its three main business segments in 2019, promoting it to investors as a stable, high-growth engine less exposed to commodity volatility.

Key Figures and Entities

The SEC named former ADM chief financial officer Vikram Luthar as playing a central role in the accounting scheme. According to the SEC complaint, Luthar orchestrated the movement of profits from other ADM divisions into Nutrition to meet publicly stated growth targets of 15-20% annually. The agency also named executives Vincent Macciocchi and Ray Young as participants, with Macciocchi agreeing to pay more than $400,000 and Young more than $500,000 in disgorgement. Luthar's attorney, Junaid Zubairi, called the allegations "meritless" and stated that an internal ADM investigation found no improper conduct by his client.

Legal and Financial Mechanisms

According to the SEC's complaint, the fraudulent accounting began in 2019 when ADM executives shifted $4.7 million in operating profit to Nutrition through improper rebates. The scheme accelerated in 2020-2021 after Luthar became Nutrition's CFO, with approximately $20 million transferred to offset soybean price increases. The transactions were structured as "risk sharing" agreements rather than arm's length deals, allowing Nutrition to meet its promised 20% growth target when actual performance would have yielded only 17%. By 2022, Nutrition was "begging for money" internally, yet publicly, Luthar told investors the business "continued its strong growth trajectory." During this period, Luthar sold more than $1.8 million of ADM stock.

International Implications and Policy Response

The case highlights ongoing challenges in financial oversight of multinational commodity companies, particularly regarding intersegment transactions that can obscure true business performance. ADM's troubles come as it continues to recover from a previous compliance issue—its subsidiary pleaded guilty in 2013 to violating the Foreign Corrupt Practices Act and paid $17 million in penalties. The SEC fine and closed DOJ probe demonstrate the limits of regulatory enforcement, with ADM avoiding admission of wrongdoing despite evidence of systematic financial manipulation that misled investors about its fundamental business performance.

Sources

This report draws on SEC press releases and complaints, company statements, Reuters reporting, Financial Times coverage, and court filings between 2013 and 2026.