SEC, Whole Foods' Board to Review Chief's Online Postings
Wednesday, July 18, 2007
Whole Foods Market said yesterday that its board of directors and federal regulators are investigating online postings by the firm's chief executive, who apologized for his actions.
John Mackey, using the name "rahodeb," boasted about Whole Foods and attacked rival Wild Oats Markets on financial Web sites.
"I sincerely apologize to all Whole Foods Market stakeholders for my error in judgment in anonymously participating on online financial message boards," Mackey said in a statement yesterday. "I am very sorry and I ask our stakeholders to please forgive me."
Some of Mackey's postings from 1999 to 2006 said Wild Oats was overvalued and poorly run. This year, Whole Foods announced it would buy Wild Oats for about $565 million, but federal antitrust regulators won an injunction temporarily blocking the deal.
Whole Foods said it was contacted late Monday by the Securities and Exchange Commission. The Austin company said it plans to cooperate with the investigation.
The company also said its board formed a committee to investigate Mackey's postings. The committee hired the law firm Munger, Tolles & Olson as advisers.
The company said the board wouldn't comment further until the internal investigation is completed.
Legal experts have said it is unclear whether the postings violated securities laws. Regulators would have to prove that Mackey tried to manipulate stock prices of Whole Foods or Wild Oats. Some experts said the comments were more of an embarrassment than a legal problem for Whole Foods.