Vegan mayo company Hampton Creek keeps making headlines for all the wrong reasons. First, the company was ordered by the U.S. Department of Agriculture to change the name of its product Just Mayo, and now it’s being investigated by the U.S. Securities and Exchange Commission for a massive buyback scheme that made the company seem more successful than it actually was.
After a report was released by Bloomberg with dozens of firsthand accounts from former employees, the federal government is investigating to determine whether CEO Josh Tetrick failed to properly recognize the internal revenue. The SEC has sway over this case because of the money raised from outside investors.
“It doesn’t matter if the security is a private or public one; the SEC can bring an action against both,” Jay Gould, a former SEC attorney and now partner at Winston & Strawn, told Bloomberg. Gould was speaking generally and is not involved in the Hampton Creek matter.
Hampton Creek representatives said at the time of the iniquity that the self-purchases, which go back as far as 2014, were mostly for “quality assurance purposes.” Tetrick has confirmed with media that the self-purchases account for less than 0.12 percent of total revenue.
The SEC will determine whether Hampton Creek handled its finances legally or if something more dubious was going on.