US regulators are looking into whether startup food company Hampton Creek violated the law by buying its own “Just Mayo” product, Bloomberg reported on Thursday.
The SEC’s inquiry was prompted by concerns that the purchases could have had an impact on the company’s bottom line.
As Bloomberg’s Matt Robinson and Olivia Zaleski noted, the federal agency wants to know whether Hampton Creek “improperly recognised revenue from purchases made with company money.”
CEO Josh Tetrick rejected the suggestion earlier this month, saying the purchases “had no impact at all” on sales.
The purchases reportedly began in early 2014, about eight months before Hampton Creek closed a $90 million round of venture-capital financing.
“We’re aware of the informal inquiry and we’ll be sharing the facts, as opposed to the inaccuracies reported by Bloomberg,” Tetrick said in an e-mailed statement to the publication.
“The opening of an SEC inquiry into the buybacks is a preliminary step and doesn’t mean the company will face an enforcement action,” he added.
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