The SEC on Monday charged Canadian pot producer Cronos Group and a former executive with accounting fraud, accusing them of improperly booking sales and overstating revenue by millions of dollars.
The Securities and Exchange Commission on Monday charged Canadian pot producer Cronos Group Inc. and a former executive with accounting fraud, accusing them of improperly booking sales and overstating revenue by millions of dollars.
See also: Former CEO of NewAge, a drink company that shot to pot-stock fame, accused by SEC of ‘multiyear fraud’ The agency also found that Hilson, in one of those quarters, made an oral agreement to sell “cannabis raw material and to repurchase cannabis product in the following quarter” — a $2.3 million oversight that “was neither known nor accounted for by Cronos.”
“While today’s order finds that Cronos’s controls were not up to standards when it began filing financial statements with the SEC, Cronos avoided penalties by promptly self-reporting its accounting misconduct as it came to light within the company, cooperating with our investigation, and promptly taking effective remedial steps,” Mark Cave, associate director in the SEC’s Enforcement Division, said in a statement.
Last week, the SEC accused former NewAge Inc. NBEVQ, Chief Executive Brent David Willis of a “multiyear fraud” that included misleading public statements meant to promote the wellness beverage maker, which once pitched itself as primed to capitalize on CBD drinks. “During this time period, there were a limited number of third-party firms in Canada that either had the capacity to purchase Cronos’ lower-quality biomass and convert to other uses, or the ability to supply resin to Cronos for use in vaporizer cartridge production,” the SEC said. “Cronos considered its dealings with such third-party firms to be part of its wholesale channel.”
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