Ahold Agrees to Settle U.S. Civil Fraud Charges

Global grocery retailer Ahold has agreed to settle civil fraud charges over an alleged $1-billion overstatement of earnings in a deal with U.S. regulators that does not fine the company.

The Securities and Exchange Commission and Ahold, the Dutch operator of the Giant and Stop & Shop grocery chains in the U.S., announced the settlement Wednesday. The SEC also disclosed agreements with three former executives in the financial scandal, which focused on Ahold’s distribution subsidiary U.S. Foodservice Inc.

The agency’s lawsuit against Ahold, filed in federal court in Washington, alleged that Ahold fraudulently overstated sales by billions of dollars and fabricated hundreds of millions of dollars of earnings.

The company and the three individuals -- former Chief Executive Cees Van der Hoeven, former Chief Financial Officer Michiel Meurs, and Roland Fahlin, a former member of Ahold’s audit committee -- neither admitted nor denied the allegations.

Ahold agreed to a permanent injunction against securities-law violations. Van der Hoeven and Meurs were banned from serving as executives or directors of publicly traded firms. Fahlin agreed to refrain from securities-law violations.

The SEC said the company was not fined because of its “extensive cooperation.” The agency said it did not seek fines against the individuals because Dutch prosecutors conducting a criminal investigation had asked the SEC not to do so because of potential double jeopardy.