Diamond Foods Can't Dodge Investor Suit Over Walnut Scandal

Law360, New York (December 3, 2012, 3:11 PM EST) -- A California federal judge on Friday refused to toss a consolidated class action accusing Diamond Foods Inc. of making improper payments to walnut growers that led to the snack food maker's ultimately failed acquisition of Pringles potato chips and caused the company’s stock to plummet.

U.S. District Judge William Alsup denied Diamond’s motion to dismiss the complaint, saying the plaintiffs’ allegations of simple breaches of generally accepted accounting principles created a sufficiently strong inference of wrongdoing.

“The magnitude of the wrongful accounting, the fact that the...
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