Exclusive: US Justice Department probes ADM’s ethanol trading desk, sources say
NEW YORK/CHICAGO, March 13 (Reuters) – The U.S. Justice Department is investigating Archer-Daniels-Midland’s (ADM.N), opens new tab ethanol trading operation as part of a broader probe of the commodities giant’s accounting practices, according to three people with knowledge of the matter.
The U.S. Attorney’s Office for the Southern District of New York (SDNY) is probing whether ADM improperly accounted for hedges in its ethanol trading unit, the three sources said.
ADM, a $28 billion company that makes animal feed, sweeteners and other products, is also a large producer of ethanol, a biofuel made from corn.
ADM this week confirmed Reuters reports that the Justice Department is investigating accounting practices related to ADM’s Nutrition unit and that current and former employees had received grand jury subpoenas relating to that probe.
The Chicago-based company said the investigation was “focused primarily” on the Nutrition business. The DOJ probe into ADM’s ethanol trading operation was not previously reported.
The additional scrutiny indicates that the Justice Department is taking a broader look at ADM’s accounting practices than previously reported – another challenge for the company as it seeks to restore investor confidence.
A spokesperson for ADM said the company declined to comment on the government investigation beyond what it disclosed on Tuesday. A spokesperson for SDNY also declined to comment.
ADM said this week it was cooperating with authorities. Government investigations are not evidence of wrongdoing and do not necessarily result in charges.
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