Diamond's Shoddy Farmer Pay Caused Stock Plunge: Suit

Law360, New York (November 9, 2011, 4:23 PM EST) -- Investors in Diamond Foods Inc. on Monday filed two class actions alleging a burgeoning scandal over improper payments to walnut growers that caused a delay in the snack food maker's acquisition of Pringles potato chips also hammered Diamond's stock.

In the two lawsuits filed in California federal court, investors claim Diamond puffed up its earnings by improperly accounting for at least $50 million in payments to walnut farmers that were designed to artificially lower the company's costs for fiscal 2011. When those payments came to light...
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