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  • 08.19.16

Report: SEC probing whether Hampton Creek broke the law by not disclosing buyback program

The U.S. Securities and Exchange Commission is examining whether Hampton Creek violated the law by not disclosing to investors that the startup was buying thousands of its own Just Mayo products at stores, which may have improperly inflated its revenue, reports Bloomberg.

Earlier this month, company founder and CEO Joshua Tetrick told Fast Company that the scheme was intended to pull faulty product off shelves, perform quality assurance tests and to secure shelf space in an intensely competitive market. Tetrick said that the buy-back plan, which only cost $77,000 in total, didn’t really boost sales (overall, the company brought in $4.6 million in sales at grocery stores, not including Whole Foods, from April 2014 to April 2015, per market research firm IRI).MB