What will DOJ probe mean for Archer-Daniels-Midland?
Shares of Archer-Daniels-Midland Co. (ADM) are trading higher as the company announced employees have received subpoenas from the Department of Justice amid an investigation into the company's accounting practices. Reuters reported the probe centers on ADM's disclosure that certain inter-business unit sales within the company were not registered at amounts approximating market value.
Finance Anchors Brad Smith and Seana Smith break down the latest developments and potential ramifications for the company.
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Editor's note: This article was written by Nicholas Jacobino
Video Transcript
[AUDIO LOGO]
SEANA SMITH: All right, it's time for some trending tickers. Archer Daniels Midland, ADM shares moving higher after announcing that several employees have received subpoenas from the Department of Justice, as it investigates the company's accounting practices. Here digging also in a little bit deeper, we're also seeing a bit of a reaction here to the results that we're getting out from ADM, and largely speaking, better than feared.
And, Brad, I'm taking a look at some of this analyst commentary out here this morning. Citi saying that the results and the outlook were more or less as expected. But that the nutrition changes were not as significant as some had feared. So because of that, we are seeing this move to the upside in the stock.
BRAD SMITH: Yeah, and on the reporting side, there were-- the investigation has been initiated. The chairman and CEO Juan Luciano saying that we remain committed to strong internal controls, continuing to focus on execution. But there are some material weakness that has been identified here within the reliability of their financial statements. And that is exactly what's being looked into year-to-date.
Take a look at that chart. The shares are down by about 27%. So this investigation, it will be interesting to see what the ramifications are. But they do have a remediation plan that had been initiated, as well as this internal investigation. But it'll be interesting to see where that nets out at.
But I think at least for today's activity right now, perhaps there's a little bit more of a mindset that investors are giving to the earnings results as you were mentioning a moment ago.
SEANA SMITH: Yeah, exactly. We're looking to move to the upside of just about 6%.
