Green Mountain Coffee Roasters received a nice chuck of Virginia taxpayer money on the promise that the company would create several hundred jobs in Isle of Wight county.
It was just another jobs announcement. Except it wasn’t. Green Mountain has been the subject of a Securities and Exchange Commission since 2010 (buried in the fine print of the company’s 8-K form, found here). For those who can’t read the small print, here’s the text:
On September 20, 2010, the staff of the SEC’s Division of Enforcement informed the Company that it was conducting an inquiry and made a request for a voluntary production of documents and information. Based on the request, the Company believes the focus of the inquiry concerns certain revenue recognition practices and the Company’s relationship with one of its fulfillment vendors. The Company, at the direction of the audit committee of the Company’s board of directors, is cooperating fully with the SEC staff’s inquiry.
Short traders like David Einhorn have charged that the company has engaged in a number of shady business practices (his 110 slide presentation on the company can be found here). He has a direct financial stake in seeing the company’s stock price tank, as it did yesterday on weak earnings reports. The company took the opportunity to state that its audit committee found “no misconduct.”
So what does any of this have to do with Virginia’s handing over of millions of dollars to the company to create jobs? Follow this WAVY news report carefully:
The state’s economic development agency knew nothing about an SEC investigation until WAVY brought it to their attention. Fear not: if the company fails to deliver on its jobs promise, the economic development agencies will get the money back.
Amazing. And it raises an important question: just what sort of due diligence does the state conduct before it agrees to such deals?
