Bloomberg Law: “ADM Must Defend Against Investor Claims of Accounting Issues”

Robbins Geller Defeats Archer-Daniels-Midland Company’s Bid to Dismiss Securities Fraud Action

On March 12, 2025, Robbins Geller Rudman & Dowd LLP defeated Archer-Daniels-Midland Company’s bid to dismiss a securities fraud suit against the company and several of its officers. The Firm brought the suit on behalf of investors last year, and with the court’s decision rejecting each of the defendants’ motions to dismiss in their entirety, the suit is now proceeding to discovery and, potentially, a trial in federal court in Illinois. 

The Case Against ADM

This case involves allegations that ADM, one of the world’s largest agribusinesses, engaged in a serious accounting fraud that deceived investors about the performance of the company’s critical Nutrition business segment. When the accounting scheme was revealed, ADM’s stock price experienced a historic plunge – the worst in nearly a century.

Last year, ADM abruptly placed its Chief Financial Officer on administrative leave pending an investigation into allegations of potential accounting irregularities involving the company’s Nutrition business. As alleged in the suit, ADM has focused on its animal and human Nutrition segment as a key driver of its future growth. The Nutrition business bought ingredients from other ADM business segments, and under GAAP and its stated accounting policy, ADM was supposed to record those transactions at market rates. However, ADM accounted for these purchases at below market rates. This accounting scheme allowed ADM to portray its Nutrition business as far more profitable than it actually was, according to allegations in the suit.

When this “accounting scandal” became public, ADM delayed reporting its fourth quarter 2023 and fiscal year 2024 results and withdrew its market guidance for its Nutrition segment. According to Bloomberg Law, ADM “drew Securities and Exchange Commission and Department of Justice investigations” over its accounting treatment of its Nutrition segment. The price of ADM shares plunged 24% in the aftermath of the accounting scandal, the stock’s “worst day since 1929.” Our Firm and our co-counsel at Motley Rice brought this securities fraud class action suit on behalf of injured ADM investors. 

The Court’s Ruling

The United States District Court for the Northern District of Illinois rejected ADM’s bid to dismiss the investors’ suit, ruling that “[t]wo years after the false accounting practice was implemented, Defendants changed their compensation structure to benefit from it. . . . Defendants’ compensation was directly tied to the profits of the Nutrition segment specifically, rather than that of ADM as a whole. This chain of events plausibly suggests a motive to at least maintain the fraudulent practice.” The court also held that “the apparent simplicity of the accounting fraud provides further support for a strong inference of knowing or deliberate disregard.”

Bloomberg Law stated that the court “trounced” the company’s efforts to pick apart the allegations in the complaint and emphasized that suspicious departures of key executives in the aftermath of the accounting scandal – as well as government investigations into the company’s conduct – contributed to a strong inference of intent on the part of the company.

Partner James E. Barz, who argued on behalf of the investors at the hearing on the motion to dismiss, told Bloomberg Law: “We are pleased that all four motions to dismiss were denied in their entirety and look forward to prosecuting the case as long as needed to provide a recovery for investors.”

The case is proceeding under the leadership of the National Elevator Industry Pension Fund and KBC Asset Management NV, who are serving as lead plaintiffs in this action and representing the investor class.

Robbins Geller attorneys James E. Barz, Frank A. Richter, Christopher D. Stewart, Jennifer N. Caringal, Cameran M. Gilliam, and Michael J. Stramaglia represent the lead plaintiffs.

To view the Bloomberg Law article, click here: https://news.bloomberglaw.com/daily-labor-report/adm-must-defend-against-investor-claims-on-accounting-practices.

About Robbins Geller

Robbins Geller Rudman & Dowd LLP is one of the world’s leading complex class action firms, representing plaintiffs in securities fraud, shareholder derivative, antitrust, corporate takeover, and consumer fraud and privacy cases. With 200 lawyers in 10 offices, Robbins Geller is one of the world’s largest plaintiffs’ firms and the Firm’s attorneys have obtained many of the largest securities, antitrust, and consumer class action recoveries in history.

According to NERA, an independent economic consulting firm, Robbins Geller secured eight of the ten “Top Settlements” in U.S. securities litigation in 2024 and six of the top ten as sole lead counsel. The Firm has recovered more than $1 billion for investors in each of the last four years. The Firm’s attorneys also secured the largest-ever U.S. securities class action recovery - $7.2 billion - in the Enron case.

For media inquiries, please contact media@rgrdlaw.com or call (619) 338-3821.

Chow v. Archer-Daniels-Midland Co., No. 1:24-cv-00634 (N.D. Ill.).