Sealed Air Corporation’s (SEE) Accounting Practices Investigated
According to the filed complaint seeking to inspect the Company’s books and records to determine if its officers and directors breached fiduciary duties and/or engaged in gross mismanagement, Sealed Air’s accounting policies have made it the subject of an SEC investigation for more than a year. The SEC is investigating the Company’s accounting for income taxes, financial reporting and disclosures, and process for selecting its independent audit firm. As a result of the investigation, the SEC has shed light on severe problems with Sealed Air’s accounting practices that suggest it does not comply with Generally Accepted Accounting Principles (“GAAP”). In May 2019, Sealed Air created an audit committee to conduct an internal review that led to the termination of its CFO “for cause” and the replacement of its independent financial auditor. Finally, on August 2, 2019, the company revealed it had received the Grand Jury Subpoena from the U.S. Attorney for the U.S. District Court for the Western District of North Carolina, suggesting the government may be considering indicting Sealed Air. As a result of the investigations, a shareholder of Sealed Air requested the production of all board materials concerning the audit committee’s internal review and the SEC and Grand Jury subpoenas, among other things. Because the Company has failed to produce the requested documents, the shareholder has filed an action with the court.