U.S. – SEC Diageo Disclosure Failures

U.S. – SEC Diageo Disclosure Failures

On 19 February 2020, SEC charged Diageo, failing to make required disclosures.

  • Charged global alcohol producer, Diageo, with disclosure failures of known trends relating to shipments of unneeded products by N.American subsidiary to distributors.
  • Violated antifraud provisions of SEA S 17(a)(2), (3), certain reporting provisions.

Alleged Violations

  • Employees at Diageo NA (DNA), its largest and most profitable subsidiary, pressured distributors to buy products in excess of demand to meet internal sales targets.
  • Resulting increase in shipments enabled Diageo to meet performance targets, report higher growth in key performance indicators closely followed by investors, analysts.
  • Diageo failed to disclose trends that resulted from shipping products in excess of demand, the positive impact overshipping on sales and profits, and the negative impact that the unnecessary increase in inventory would have on future growth.
  • Investors left with misleading impression that Diageo, DNA able to achieve growth in certain key performance indicators through normal customer demand for products.


  • Diageo has agreed to pay $5 million to settle the action.