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SEC, OSC cite Cronos Group for accounting fraud

2022-10-24 20:41 ET - Street Wire

Also Street Wire (C-*OSC) Ontario Securities Commission
Also Street Wire (C-CRON) Cronos Group Inc

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by Mike Caswell

The U.S. Securities and Exchange Commission and the Ontario Securities Commission have imposed penalties on Cronos Group Inc., a cannabis producer with listings on the Toronto Stock Exchange and Nasdaq, for an accounting fraud from 2019. The SEC claims that Cronos overstated its revenue by $5.8-million. (All figures are in U.S. dollars.) It also failed to record a $234.9-million impairment charge related to its underperforming Lord Jones venture in a timely manner, according to the SEC.

The allegations against Cronos are contained in an administrative order that the SEC filed on Monday, Oct. 24, alongside a parallel proceeding brought by the OSC. Cronos has agreed to pay $1.34-million (Canadian) to settle the OSC matter, with the SEC content to impose no fine based on the OSC settlement. In addition, the company's former chief financial officer, William Hilson, has agreed to pay $70,000 (Canadian) to settle the case. Neither admitted any wrongdoing in reaching the deal.

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