The Securities and Exchange Commission has launched an informal inquiry into the stock options practices of The Hain Celestial Group, a maker of organic foods and personal-care products, according to the company.
While the company said it would cooperate with the SEC probe, it did not provide further details. In November, however, the company said in a regulatory filing that a shareholder-derivative action was filed in New York State Supreme Court alleging that current and former officers and directors had breached their fiduciary duties and received “unjust enrichment” under the company’s past stock-option practices.
Hain said then that it had reviewed its historical stock option grants and that there had not been any inappropriate conduct. It also said it did not expect any restatement of its prior financials.
The natural-foods company also pointed out that its independent auditors issued an unqualified audit opinion for the fiscal year ended June 30, 2006, and that all annual and interim financial statements have been filed on a timely basis.
At the time, it also said that it had not been subject to any regulatory investigation regarding its stock option practices. That situation, however, has apparently changed.