SEC charges AgFeed audit committee chair in broader accounting fraud case

WASHINGTON, March 11 Tue Mar 11, 2014 2:03pm EDT

WASHINGTON, March 11 (Reuters) - U.S. securities regulators on Tuesday filed civil charges against a corporate audit committee chairman for his role in covering up what they say was a massive accounting fraud at a now-bankrupt animal feed company, in a rare charge against an audit director.

The Securities and Exchange Commission's charges against AgFeed Industries Inc's U.S.-based audit committee chairman K. Ivan Gothner are part of a broader lawsuit filed in a federal Tennessee court against the company, four of its top executives based in China including its chief executive officer and several other U.S.-based company officials.

The SEC alleges in its lawsuit that the company, which operated in both the U.S. and China, inflated its revenue from 2008 to mid-2011, in part by using fake invoices for feed and hog sales.