U.S. Securities and Exchange Commission Litigation Release No. 26271, dated March 17, 2025.
The SEC charged Glen Leibowitz, former CFO of Acreage Holdings, Inc., for allegedly lying to auditors and falsifying records. Leibowitz participated in a $4.2 million round-trip cash transaction designed to inflate the company's year-end 2019 cash balance, then misled the company's auditor about the sham transaction.
In Plain English
Imagine you want to make your piggy bank look like it has more money at the end of the year. You borrow $100 from a friend, put it in your piggy bank, and then give it right back to your friend on New Year's Day. You then tell everyone your piggy bank had more money, even though it was just a temporary trick. That's similar to what the former CFO is accused of doing with company money, and then lying about it to the people checking the company's finances.
Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.
How the Alleged Scheme Worked
- Inflate Cash Balance In late December 2019, Glen Leibowitz, CFO of Acreage Holdings, Inc., allegedly orchestrated a plan to make the company appear to have more cash than it did. He arranged for an affiliated entity to transfer approximately $4.2 million into Acreage's bank account on December 26, 2019.
- Sham Transaction This $4.2 million transfer was understood to be temporary. Leibowitz knew the money would be returned to the affiliated entity at the beginning of the new year, meaning the transaction had no real economic purpose and was solely intended to boost Acreage's year-end cash balance.
- Mischaracterize Records With Leibowitz's knowledge, Acreage's accounting staff created journal entries to hide the true nature of the transaction. Initially, these entries falsely described the transfer as a repayment of debt owed by the affiliate, and later as a short-term loan.
- Internal Concerns Raised Concerns about this transaction were escalated by employees to a member of Acreage's board of directors. This board member began making inquiries into the nature of the cash transfer.
- Reverse Transaction In response to the board member's inquiries, Leibowitz allegedly directed accounting staff to record another journal entry. This entry effectively reversed the transaction, making it appear as though the funds were returned in December 2019, not January 2020.
- Conceal from Auditors Despite the transaction being reversed and not included in the final financial statements, Leibowitz allegedly lied to Acreage's outside auditor during the fiscal year 2019 audit to cover up his involvement.
- False Oral Statements Leibowitz initially told the auditor that the affiliated entity sent the money on its own accord as a debt repayment, and Acreage returned it only because the affiliate's board hadn't approved the payment.
- False Written Statements Later, in May 2020, Leibowitz emailed the auditor describing the transfer as an 'incorrect cash payment' from the affiliate's side, claiming Acreage returned it once the 'error' was found. He also signed a management representation letter that incorporated these false statements.
- Omitted Key Facts Leibowitz failed to disclose to the auditor that Acreage directed the transfer, planned to return the money immediately, and that the purpose was to inflate the cash balance. He also omitted his own participation and the involvement of other senior management.
The Enforcement Action
On March 14, 2025, the SEC filed a complaint in the U.S. District Court for the Southern District of New York against Glen Leibowitz. The SEC charged Leibowitz with violating Section 13(b)(5) of the Exchange Act and Rules 13b2-1 and 13b2-2 thereunder, and with aiding and abetting Acreage's violations of Section 13(b)(2)(A) of the Exchange Act. The SEC seeks permanent injunctive relief, civil monetary penalties, and a conduct-based injunction.