The SEC’s order resolves the agency’s claims of violations related to the federal Securities Exchange Act’s recordkeeping provisions. Acreage consented to the order without admitting or denying the allegations, and the company has pledged to cooperate in any future investigations or proceedings related to the matter.
This settlement comes after Acreage faced scrutiny over its financial records as it prepared to wrap up its 2019 fiscal year. The company had been concerned about its cash balance, especially as cannabis industry analysts focused on this metric. According to SEC filings, Acreage officials had expressed concern over the company’s position compared to its competitors, prompting them to ask the affiliated entity for a temporary cash transfer instead of paying down an existing line of credit.
The SEC also noted that Acreage had a long-standing relationship with the affiliate, providing management services and financial oversight. The transaction, which took place around the year’s end, was mischaracterized in Acreage’s accounting documents, and was later flagged by employees, including a compliance hotline complaint.
