SEC May Charge Kraft, Dean Over Fleming

Two major U.S. food companies may face civil charges from federal regulators on allegations that they helped food distributor Fleming Cos. inflate its revenue.

Kraft Foods Inc., the largest North American food maker, and Dean Foods Co., the No. 1 U.S. dairy processor, said they had received notices from the Securities and Exchange Commission on the matter.

According to the notices, employees at both companies signed documents that allowed Fleming to book sales as current income rather than as deferred revenue. Fleming is being investigated for issues including vendor trade practices and its presentation of earnings.

Kraft and Dean said their accounting for the transactions was not at issue, and both said they planned to cooperate fully and respond to the SEC.

Shares of Kraft fell 16 cents to $28.99 and Dean shares were up 23 cents at $30.93, both on the New York Stock Exchange.