A former officer of American Italian Pasta Co. in Kansas City will pay more than $660,000 in penalties on claims that he violated securities laws.
Under a consent judgment entered today in U.S. District Court in Kansas City, David E. Watson must disgorge more than $397,000 in profits from the alleged securities fraud. Watson also must pay $189,000 in interest and a $75,000 civil penalty. Watson did not admit fault.
According to a complaint by the U.S. Securities and Exchange Commission, Watson, the company’s executive vice president of operations and corporate development, helped mislead investors about growth of the company’s earnings, artificially increasing the company’s stock price.
In recent years, other former officers of the company have been fined or imprisoned on similar charges, as part of what the U.S. Attorney’s Office for the Western District of Missouri has called the largest corporate fraud investigation in its history.
American Italian was acquired by Ralcorp Holdings Inc. last year.