LIVE UPDATES: Former Bumble Bee CEO Chris Lischewski found guilty of price-fixing
The Department of Justice (DOJ) alleges Lischewski was the mastermind behind a vast conspiracy to fix prices -- a charge the executive hopes to dodge.
The Department of Justice (DOJ) alleged Lischewski was the mastermind behind fixing canned tuna prices with co-conspirators from Starkist and Thai Union's Chicken of the Sea "beginning in or about November 2010 and continuing until in or about December 2013."
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Lischewski served as chair of NFI, the leading seafood trade group in the United States, throughout 2013 and was an active member of the organization prior to his indictment in 2018.
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Bumble Bee Foods was coy in its reaction to the news that former CEO Chris Lischewski was found guilty of participating in a conspiracy to fix prices of canned tuna sold in the United States.
The company sent a statement that did not directly address the verdict, but instead repeated the exact announcement it made following last month's announcement that the company had filed for Chapter 11 bankruptcy in a Delaware court.
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A letter filed by Starkist on Nov. 26 to the US Court of Appeals cites that the bankruptcy filing of Bumble Bee "confirms" that the class action certification has led to "financial ruin" for one of the three parties appealing.
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The end is near for former Bumble Bee CEO Chris Lischewski as both defense and prosecution rested their cases in front of a US District Court jury in San Francisco, California.
US Department of Justice prosecutor Manish Kumar told jurors on Monday not to be swayed by Lischewski attorneys' claims that the executive was ignorant of the price-fixing scheme, and reminded them of the amount of money the companies were able to bring in as a result of their actions.
The DOJ argued that Lischewski acted under pressure from parent group Lion Capital, which demanded the executive deliver $140 million (€126 million) in earnings to justify the price for acquiring the canned seafood giant, Kumar argued.
Previously, Lischewski testified he had no knowledge of price-fixing among the companies involved. However, the new testimony included an admission that he may have asked employees to gather details from Bumble Bee competitors.
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Lischewski testified in front of a California federal jury that he had no knowledge or involvement in a price-fixing scandal that occurred between former employees of Bumble Bee, Starkist and COSI sometime between 2010 and 2013.
Lischewski said he didn't order subordinates to engage in price-fixing agreements with competitors while conceding “it’s possible” his subordinates got pricing information from them.
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According to Hodge's testimony, all three tuna companies lifted prices simultaneously.
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The motion was in response to Cameron's testimony before the jury, where he stated he met with the government four or five times with a paralegal being present.
"However, Mr. Cameron could not recall who was present at these meetings, when they occurred, or what specifically was discussed because the last couple of weeks were a 'blur,'" Lischewski's lawyers said.
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Lischewski's defense questioned a tearful Walter Scott Cameron, Bumble Bee's former senior vice president of sales, on Tuesday, probing how strongly the prospect of going to jail factored into evidence he provided the DOJ prior to the criminal trial.
A tearful Cameron acknowledged that getting a reduced sentence and going to jail did factor into his decision to cooperate with the government, according to the news site.
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In its opening statement, DOJ attorneys said the price-fixing scheme "tears at the very fabric of our free market system."
The DOJ has won guilty pleas from several executives and all three of the major companies for taking part in the conspiracy, ordering millions of dollars in fines.
Lischewski’s attorneys opened the trial by telling jurors tuna prices over the alleged period of price-fixing "reflect stiff competition," and that Lischewski was not involved even if a conspiracy did exist.
(Copyright)<b>Timeline of alleged price fixing events</b>
2004 - 2010. Defendants shared a common canner in American Samoa, Impress, which is allegedly connected to collusive can size reduction.
2004. Groups colluded to increase prices of canned tuna at least twice.
2006. Groups colluded to increase prices of canned tuna at least once. “By 2007, defendants became more practiced and ambitious in their collusive designs," allegedly downsizing their can size while raising prices.
2007: The NFI created the Tuna Council, whose only members were the defendants, allegedly.
2008. Alleged collusion on price increases on canned tuna.
2010: Defendants allegedly colluded and raised net prices on canned tuna. Net prices are the prices disseminated to brokers of shelf stable seafood products, and represent the list price, less promotional allowances offered by defendants to reduce the list price.
November 2011 - June 2013: Senior executives and sales personnel of the StarKist, Bumble Bee and Chicken of the Sea allegedly "exchanged emails and had telephone conversations about discounting and promotional practices and terms for the sale of canned tuna to customers." They also allegedly "assured each other that they would not compete regarding the pricing and sale of canned tuna sold to customers."
December 2011 and January 2012: Senior executives and sales personnel of defendants allegedly had telephone conversations "about coordinating and announcing a price increase for a number of products in the second quarter of 2012." Price increases were allegedly "virtually identical" and "other products also increased by identical percentages."
2011 - 2013: StarKist, Chicken of the Sea and Bumble Bee allegedly told customers certain factors in the tuna sector made it necessary to increase tuna prices. They allegedly "cited their own predictions about where the tuna market was heading as the basis for a price increase."
2012 - July 2015: Defendants and their co-conspirators allegedly agreed to avoid FAD-free tuna.
July 2015: Published reports revealed US Department of Justice convened a grand jury to investigate potential antitrust violations by companies in the market for the production, pricing and/or sale of packaged seafood, including canned tuna.