Cronos Shares Fall 5.1% After Hours On SEC Charges for Alleged Accounting Fraud

By Kathryn Hardison

Shares of Cronos Group Inc. fell 5.1% to $2.79 in after-hours trading on Monday after the U.S. Securities and Exchange Commission said it charged the company for alleged accounting fraud in multiple reporting periods.

The SEC charged the Toronto-based cannabis company for improperly accounting for millions of dollars of revenue and for other accounting misconduct in three separate quarters between 2019 and 2021, it said. The commission also charged the company's former chief commercial officer, William Hilson, with fraud and aiding and abetting the company's violations.

Mr. Hilson also entered into an undisclosed oral agreement to sell cannabis raw material and to repurchase cannabis product in the following quarter, the SEC alleged.

Cronos and Mr. Hilson offered to settle the matter, without admitting or denying fault, by agreeing to cease and desist from future violations of the charged provisions, the SEC said.

In addition, Cronos agreed to retain an independent compliance consultant to review, assess and make recommendations to the firm's financial reporting and accounting controls, the SEC said. Mr. Hilson agreed to a three-year officer and director bar and agreed to be suspended from appearing and practicing before the SEC as an accountant for at least three years.

The SEC decided to not impose a financial penalty after Mr. Hilson consented to pay $54,000 to the Ontario Securities Commission for similar conduct, it said.

Write to Kathryn Hardison at [e-mail]

(END) Dow Jones Newswires

October 24, 2022 17:42 ET (21:42 GMT)

Copyright (c) 2022 Dow Jones & Company, Inc.