Friday, August 26, 2016

"Hampton Creek Faces U.S. Criminal Probe Over Mayo Buybacks"

This thing has always had a whiff of Frat-boys-do-create-a-corp. about it.

From Bloomberg:
The U.S. Justice Department has opened a criminal investigation into whether Hampton Creek Inc. committed fraud when it bought its own vegan mayonnaise from stores, according to people familiar with the matter. The food technology startup has already drawn a regulatory inquiry over allegedly improper purchases.

Federal investigators reached out to former Hampton Creek contractors this week to discuss the undercover buyback campaign allegedly conducted by Josh Tetricks’s San Francisco startup, one of the people familiar with the situation said. The criminal investigation is in its early stages, and it’s unclear whether the matter will lead to charges or penalties, another person said.

Tetrick, the co-founder and chief executive officer of Hampton Creek, wrote in an e-mailed response to a question about the probe: “We have no reason to believe this is true.” The company declined to elaborate. Peter Carr, a spokesman for the Justice Department, declined to comment.

Bloomberg first reported early this month that Hampton Creek bought jars of its own vegan mayonnaise products from supermarkets across the U.S. The Securities and Exchange Commission is scrutinizing whether Hampton Creek improperly recognized revenue from the campaign to buy jars of Just Mayo, Bloomberg reported last week. The company confirmed the SEC inquiry.

The U.S. officials are examining whether the buyback program violated fraud and securities statutes by making the startup look more successful to prospective investors than it actually was, the people said. Tetrick has said the self-purchases accounted for less than 0.12 percent of sales and were primarily for quality assurance. The scrutiny comes as Hampton Creek engages in fundraising efforts aimed at boosting the value of the company to more than $1 billion, people familiar with the matter have said....MORE 
Previously on Phi Scamma Jamma:
August 4, 2016 
"Just Mayo" Guys, Hampton Creek, Used Investor Money To Buy Its Own Product Off Store Shelves
Stay classy bro....
August 2015
Silicon Valley's Favorite Futuristic Food Company, Hampton Creek, May Be A Bit Fraudy
August 2015
FDA Says "No Eggs, Not Mayo": VC-backed Hampton Creek's CEO Is Defiant
September 2014
Forget GMOs. The Future of Food Is Data—Mountains of It
September 2013
Which Came First: The Artificial Plant-based Egg That Bill Gates and Peter Thiel Are Backing