UPDATE: There's a Senate hearing today on the pet food recall (see lulu57's comment below). I'm seeing how many senators I can email before I need to leave for work. Thanks to everyone for your support!
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Thanks to SusanHu's excellent diary from Tuesday, we know that Mark Weins, Menu Foods' Chief Financial Officer, sold half of his company stock on February 26 and 27, about three weeks before the pet food recall was announced. Sure sounds suspicious, right?
But both recent stories quote the company spokesman, Sam Bornstein, as saying it was all just "a horrible coincidence." Let's see if we believe that....
First, two quotes from the stories about the stock sales. Damage control, anyone?
From Canada's Globe and Mail:
Mr. Wiens said the first reports of illnesses and deaths related to Menu Foods products came in to the company's toll-free customer relations line in late February.
But he said he did not hear of any possible problem with the company's products until early March.
And from yesterday's AP story in the SF Chronicle:
Menu Foods began getting calls about sick cats around Feb. 26, but Bornstein said Wiens would not have known about them due to the size of the company. The calls didn't cause alarm until a week later.
A horrible coincidence indeed! We all know how slowly news can travel in a big company.
Only one little problem: before the CFO's stock shares became public knowledge, the timeline looked a little different.
An AP story from March 20 (CBS, San Jose Mercury News)
(hat tip to Anna for linking this story in her earlier diary)
Menu Foods told the FDA it received the first complaints of kidney failure and deaths among cats and dogs from pet owners on Feb. 20. It began new tests on Feb. 27.
During those tests, the company fed its product to 40 to 50 dogs and cats and seven animals — the mix of species was not immediately known — died, Sundlof said. The contamination appeared more deadly to cats than to dogs, he said.
from Reuters Canada, March 19:
According to the FDA, Menu Foods received the first of six complaints about kidney failure in pets on February 20. Seven days later, the company began an internal taste test of its food. A cat in the study exhibited signs of kidney failure and died on March 2.
So let's review. The first calls came in six days before Mr. Weins began selling his shares. That's plenty of time for news to travel. It's looking more and more like he used his insider knowledge to dump enough of his stock so he wouldn't have to take the loss he knew would be coming.
But Mr. Weins sorrowfully claims that he just hadn't heard about the problems by then, and it was all just a terrible misunderstanding. How likely is that? Well, if the new round of animal testing was begun on the 27th, it was already being discussed by senior management by then. You don't do expensive animal testing without a good reason.
The CFO had to have known about the problems by then. I'm just disappointed that the recent news stories about the stock shares haven't cited the earlier, and likely more accurate, version of the timeline.
This is a probable securities violation... big news in anybody's book. And when it appears that someone may have profited from the deaths of so many pets, that's even worse. Hey media folks: how hard is it to pick up the phone and call the FDA?