Millions in Penalties for Walnut Juggling

     WASHINGTON (CN) - Diamond Foods snack company will pay $5 million to settle charges two of its top executives falsified walnut prices to goose earnings reports to meet stock analysts' estimates, the SEC said.
     Diamond Foods and its former CEO Michael Mendes agreed to settle the stock-manipulation charges, the SEC said in two settled complaints.
      Former CFO Steven Neil will fight the charges.
     After Diamond adjusted its earning reports in November 2012 "to reflect the true cost of acquiring walnuts," its stock plummeted to $17 per share, from a high of $90 per share in 2011, the SEC said in a statement.
     Walnut prices spiked in 2010 and Diamond juggled its books to meet Wall Street earnings, the SEC said.
     Corporate execs these days can receive enormous bonuses for meeting or exceeding short-term earnings goals, and can be fired for missing them. "Neil was facing pressure to meet or exceed the earnings estimates of Wall Street stock analysts," the SEC said in the statement. The statement added: "Neil personally benefited from the fraud by receiving cash bonuses and other compensation based on Diamond's reported EPS [earnings per share] in fiscal years 2010 and 2011."
     Mendes agreed to pay $125,000 to settle the charges, in addition to the more than $4 million in bonuses and benefits he already has forfeited, the SEC said.
     As is customary with the SEC, he did not have to admit that he did anything wrong.