How a Fortune 500 Company Faked Hitting Its Numbers and What It Looks Like from the Inside
On January 27, 2026, the Securities and Exchange Commission settled charges against Archer-Daniels-Midland Company for $40 million. Three former executives were charged. One — former CFO Vikram Luthar — refused to settle and is fighting fraud charges in federal court. ADM paid without admitting or denying wrongdoing. The Department of Justice closed its parallel criminal investigation without bringing charges.
What ADM did is not complicated. And it is not unique to ADM.
ADM has three major business segments. Nutrition — specialty ingredients for human and animal food — was the one ADM told investors to watch. Executives projected 15 to 20 percent annual operating profit growth. Analysts bought it. A January 2021 report stated that upbeat Nutrition growth commentary should drive ADM toward a higher stock valuation.
Executive compensation was tied to those numbers. The SEC's complaint states that Luthar received a $130,000 cash bonus in 2022 based partly on Nutrition's results and sold over $1.8 million of his personal ADM stock at prices the SEC says were inflated. Other executives received bonuses tied to Nutrition's performance. It was widely understood inside the company that other business units should help Nutrition meet its goals — even at their own expense.
Nutrition was not hitting its targets.
In March 2019, then-CFO Ray Young called Nutrition's first-quarter performance "very disappointing" and told a Nutrition executive it was "of utmost imperative that we deliver" over $500 million in operating profit that year. In July 2022, a Nutrition finance employee warned that part of the business "may deteriorate further."
Rather than tell investors the story had changed, ADM executives used the company's internal structure to close the gap.
Intersegment transactions — how ADM moved the money — are worth understanding because they apply far beyond ADM.
Large companies with multiple business segments don't operate in isolation from each other. Costs get allocated between divisions. These are, for all intents and purposes, transactions between different business units. Internal pricing determines which unit gets credited for shared work or materials. Journal entries move dollars from one segment's ledger to another. Most of it happens in spreadsheets and accounting systems rather than at a dock, as we typically think of a transaction. But each of these internal transactions must be recorded at a price, and that price matters because it determines how much operating profit each business unit reports, which is what investors see.
ADM told investors in its public filings that intersegment transactions were recorded at amounts "approximating market" — the same prices an outside customer would pay. Investors relied on that representation when they evaluated Nutrition's profitability.
The SEC found that ADM executives directed adjustments to intersegment transactions designed to transfer operating profit into Nutrition from the other segments. These included retroactive rebates and price changes that no third-party customer received. When Nutrition could not earn enough on its own, other divisions were told to give Nutrition better pricing after the fact to close the gap between actual results and what ADM had promised investors.
The internal communications tell the story. When a rebate was being structured to transfer profit to Nutrition, former Nutrition president Vince Macciocchi wrote to Luthar: "I don't like calling the white flake profit share a rebate. Sounds like AS&O is giving us a gift." Luthar responded that he was calling it "risk sharing."
In a separate instance, Young wrote to a Carbohydrate Solutions finance employee: "I am still looking for the $5m from [CarbSol] to [Nutrition] for [current year]. . . . I did not want to talk about this in this meeting." The employee proposed $5 million in adjustments with rationalizations the SEC says were not supported by any agreement.
When the adjustments were later reversed through ADM's restatement process, the company cut a combined $228 million from Nutrition's operating profit between 2018 and 2023. The Nutrition segment's annual operating profit had been overstated by 9.2 percent.
In January 2024, when ADM publicly disclosed the internal investigation, its share price fell 24 percent in a single trading day. Investors who had bought ADM stock based on the Nutrition growth story — the story that had been propped up by non-market intersegment transactions — absorbed the loss.
The executives who directed or approved the adjustments had already been compensated based on the inflated numbers. The SEC is now seeking disgorgement of those gains.
In February 2025, ADM announced it would eliminate 600 to 700 positions as part of a cost-cutting plan targeting $500 to $750 million in savings. Notifications went out that same week. The cuts hit factories, ports, and warehouses — including operations in Decatur, Illinois, where ADM employs roughly 4,000 people and is the city's largest employer. The state set up rapid response workshops. Decatur's mayor told reporters the workers being let go were "the cream of the crop" and that "it's terrible news for those families." By spring, the layoffs had reached ADM's global commodity trading desk in Switzerland, where managers responsible for grains, vegetable oils, and freight were let go — even though the trading desk had hit its targets for the year.
Executives inflated Nutrition's results for years. They collected bonuses tied to those results. Luthar sold $1.8 million in personal stock at prices the SEC says were inflated by the fraud. The scheme was discovered. The company restated $228 million. The stock lost a third of its value. And then hundreds of workers at plants and warehouses were told their jobs were being eliminated to save money — while CEO Juan Luciano's 2024 compensation was reported at $21.6 million. That was described as a pay cut. It was down from $24.4 million the year before. His base salary went up.
The ADM case is a useful example because it is resolved, documented, and public. The mechanics it exposes are not specific to the agriculture industry or to a single company. If you work at a publicly traded company, here is what should make you pay attention — what to look for, how to document it, and why it matters.
The story a company tells investors creates the pressure. ADM projected 15 to 20 percent growth for Nutrition and repeated that projection on earnings calls, in investor presentations, and in filings. Once that number was public, missing it had consequences — for the stock price, for analyst ratings, and for executive compensation. The projection created a target. The target created pressure. The pressure created the incentive to close the gap by any means available. This is true wherever a public company stakes its valuation on a specific initiative, transformation, or capability — and then has to deliver the numbers to match.
Internal accounting is where the gap gets closed. At ADM, the mechanism was intersegment pricing — moving profit from one division's ledger to another through retroactive rebates and adjustments that no outside customer ever received. But transfer pricing is only one version of a broader pattern. Every large company makes thousands of internal accounting decisions that determine where dollars land in the financial statements. Costs get allocated between divisions. Expenses get classified as assets or operating costs. Internal labor gets coded to projects that determine whether the hours show up as an expense this quarter or get capitalized onto the balance sheet. Shared services get charged to business units at rates set by the company itself. None of these transactions involve an outside party who might push back on the terms. All of them affect the numbers investors see. At ADM, the SEC called the intersegment adjustments "one-sided transfers of operating profit." The principle is the same anywhere internal accounting decisions are used to make a financial result look different from the underlying business reality.
Cost centers can be made to look like they generate value (or vice-versa). One of the things the ADM case illustrates is how a business unit's reported profitability can be manufactured through decisions made somewhere else in the company. Nutrition's profits were not entirely earned by Nutrition — they were partly transferred in from other segments through pricing adjustments. This same dynamic applies whenever a company uses internal allocations to make one part of the business appear more productive or valuable than it is. A division, a function, or a project can look like it is generating returns based entirely on how costs and revenues are classified internally — not based on what the operation actually produces. If the classification decisions are being made to support a number rather than to reflect economic reality, the result is the same thing the SEC found at ADM: financial statements that do not mean what investors think they mean.
When the people change but the accounting doesn't, ask why. ADM's adjustments were executed through journal entries and spreadsheets by finance employees who could see the numbers moving. In any company, the people closest to the work — the employees who do the labor, process the transactions, and maintain the systems — are also the people who can see when the accounting treatment of their work does not match the reality. If a company restructures an operation, replaces its workforce, or changes how work is performed, but the financial statements do not reflect any corresponding change in how those costs are classified or valued, that is worth understanding. Accounting is supposed to reflect economic substance. When the substance changes and the accounting stays the same, someone made a decision to keep it that way.
Executive compensation converts the pressure into personal incentive. This is structural, not hidden. Every public company discloses how it pays executives in its annual proxy statement, filed as a DEF 14A on the SEC's EDGAR database. It lists the metrics that determine bonuses: earnings per share, segment operating profit, revenue growth, or progress on strategic initiatives. When those metrics can be influenced by accounting decisions — how costs are classified, how internal transactions are priced, where expenses are recorded, what gets capitalized versus expensed — the person who benefits from the bonus is also the person who can influence the number. At ADM, the SEC's complaint details the direct line: Nutrition hits its target, Luthar gets his bonus, Luthar sells stock at the inflated price. If you want to understand the incentive structure at any public company, read the proxy. Follow the money from the bonus to the metric to the accounting judgment that produces it.
A growth story that depends on accounting decisions rather than business performance deserves scrutiny. Nutrition reported results that met or approached its growth targets for years — until the restatement revealed the numbers were manufactured. The same question applies to any initiative a company presents as a driver of future value: is the reported success coming from the operation itself, or from how the operation is being accounted for? When a company tells investors that a transformation, a technology investment, or a strategic shift is delivering results, the numbers supporting that claim depend on classification decisions that are made internally. A business that consistently delivers on ambitious projections, especially when the people doing the work or the way the work is performed has fundamentally changed, should raise questions. The question is not whether the numbers are good. The question is whether they are real.
Restatements confirm the problem after the damage is done. ADM cut $228 million from Nutrition's results across five years. By the time those restatements were filed, the stock had already traded at inflated prices and executives had already been compensated based on numbers the company later admitted were wrong. Restatements are the system working — but they work in retrospect. The only way to catch it earlier is for someone inside the company to see the discrepancy and decide it matters enough to report.
The SEC credited ADM for its cooperation: the company conducted an internal investigation, voluntarily reported its findings, and implemented new accounting controls. ADM settled for $40 million without admitting or denying wrongdoing. Macciocchi agreed to pay approximately $529,000 in disgorgement, interest, and penalties, plus a three-year ban from serving as an officer or director of a public company. Young agreed to pay approximately $651,000.
Luthar, who the SEC alleges directed the adjustments, refused to settle. His attorney called the allegations "meritless" and said that ADM's own internal investigation found Luthar had not engaged in improper conduct. The case will be decided in federal court.
The Department of Justice closed its criminal investigation without bringing charges.
There is a version of this story where ADM's internal investigation never happens, the adjustments continue, and no one outside the company ever knows.
The SEC cannot monitor the internal transactions of every public company. It depends on the people inside those companies — anyone who sees something that doesn't add up — to come forward.
ADM's case was caught. The company cooperated, restated its financials, and paid $40 million. But for every case that reaches the SEC, the question is how many don't — because the person who saw the discrepancy decided it wasn't worth the risk, or because the systems that were supposed to protect them had stopped working.
If you work at a public company and you have seen the patterns described in this article — internal transactions that don't reflect market pricing, adjustments targeted to hit a specific number, a growth story that depends on accounting decisions rather than business performance — that information has value. The SEC's whistleblower program allows anonymous tips through an attorney at sec.gov/whistleblower.
If you are a current or former employee of a public company with information relevant to accounting practices, internal cost classification, or financial reporting, you can reach out on Signal. Source confidentiality will be protected.
The McClure Standard is an independent investigative publication focused on corporate accountability. Claims are verified through sources, public filings, and documentary evidence before publication.
