The SEC and the Department of Justice, which hadlaunched preliminary inquiries into the vegan food companyHampton Creek last summer, have officially closed their inquiries, according to founder and CEO Josh Tetrick. He informed the companys 160-plus employees of the status change this morning in an email that you can find below.

Tetrick called the newsthe expected result by our leadership, board and investors.

Not everyone wasso confident in a positiveoutcomeafter a two-partBloomberg investigation attracted the government agencies attention. At the heart of Bloombergs findings wasthat Hampton Creekhad executed on a campaign to buy back mass quantities of its eggless mayo product to artificially inflate demand and, potentially, dupe investors.

In reaction, the company hired one of the Big Four accounting firms to examineBloombergs claims, which the board has said it had no knowledge of until contacted by Bloombergsreporters last fall.

A source close to the board told us at the time that if Tetrick and other managers were discovered to have been buying back mayo solely for the purpose of juicing the numbers, the board would belivid.

Whether theyre nowpatting Tetrick on the back instead isnt yet known.One of the companys few board members didnt respond to a request for comment earlier. A request for comment from Tetrick also went unanswered.

The SECs decision may not come as a complete surprise to industry watchers. The commission is largely expected to spend less time focused on Silicon Valley under President Trumps administration. In fact, his pick as SEC chair, Jay Clayton, told lawmakers during a nomination hearing yesterday he would like topare back regulations on startups. (Former SEC chair Mary Jo White felt rather differently about whether Silicon Valley needed more policing.)

ButHampton Creek hasmore to celebrate than the agencies decision. Perhaps even better news for the company are the conclusionsof that Big Four accounting firm investigation, which were also just released.

What it found, says a source close to the investigation: that Hampton Creek ordered buybacksbut that its related operationswerefar smaller than suggested in Bloomberg.

Heres the discrepancy specifically: According to Bloombergs sources which reportedlyincluded a former accounting employee Hampton Creek used several expense categories on its profit and loss statements to disguise buybacks, including one line item called Inventory Consumed for Samples and Internal Testing. Bloomberg further reported that over a five-month period in 2014, Hampton Creekexpensed about $1.4 million under that category, compared with $1.9 million of net sales in the period. Thats almost 75 percent of net sales.

Per thenewly released forensic review which were told involved research into more than 60,000 transactions that included bank account data, transactions by current and former employees, and other legacy expense data Hampton Creek expensed less than two percent of its net sales on buybacks over a much longer periodthat began in 2014 and ended the following year.The review also did notfind evidence that Hampton Creekhad used several expense categories on its profit and loss statements to disguise buybacks.

Its worth noting that Hampton Creek has neverdenied buying back its own product from stores. Instead, it said last summer that the buybacks were partially for the purposes of quality control.

Its also worth noting that Bloombergs sources consistently argued thatthis narrative is false, with some former contractors telling Bloomberg they were asked toimpersonate teachers and caterers in calls tolocal stores to order more Just Mayo. They were also reportedly told they could discard product they purchased.

In the end, consumers will have to decide for themselves whattothink. The same is true ofinvestors, some of whom may decidethat Hampton Creek has been treated unfairly, and some of whom may be harder to convince.

As investor Marc Andreessen tweeted last August in response to a Bloomberg report,No comment on specific companies, but make no mistake: Buying your own product to inflate your reported revenue is fraud.

You can find Tetricks note to employee below:

Hey all,

Several months ago, some inaccurate reporting led to SEC and DOJ Inquiries. As of today, both agencies closed their inquiries with no finding of wrongdoing by our company or any of our team members. It was the expected result by our leadership, board, and investors.

We should all be proud of the great work weve done in the last few months, from the opening of 3 labs to significant new discoveries to passing incumbents at some of the biggest retailers in the world.

Weve got a lot of important work to do. Im grateful to continue doing it with you.

Josh

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