Whole Foods says SEC probing CEO's message board postings
Jul 17 05:32 PM US/Eastern

US natural foods retail giant Whole Foods said Tuesday stock market regulators have opened a probe into its chief executive's anonymous posting on an online message board.

The Texas-based retailer said in a statement "it was contacted by the staff of the Securities and Exchange Commission" on Monday.

"The SEC staff is conducting an inquiry in relation to online financial message board postings regarding Whole Foods Market and Wild Oats Markets."

The company said it "intends to fully cooperate with the SEC and does not anticipate commenting further while the inquiry is pending."

Whole Foods acknowledged last week that its chairman and CEO John Mackey had posted "a number" of messages on a Yahoo stock market forum over an eight-year period that sometimes praised Whole Foods while lambasting rival company Wild Oats Markets Inc.

Although forthright in his online postings, Mackey hid his identity by adopting the online name "Rahodeb."

Mackey, who co-founded the growing organic and natural foods firm, stopped writing the postings in mid-2006, according to Whole Foods.

In a separate statement, Mackey said: "I sincerely apologize to all Whole Foods Market stakeholders for my error in judgment in anonymously participating on online financial message boards. I am very sorry and I ask our stakeholders to please forgive me."

Whole Foods's board said meanwhile it had formed a committee to conduct an independent internal investigation into the message board postings and had retained the law firm of Munger, Tolles Olson LLP to advise it during its review.

The latest actions come as Whole Foods's planned merger for rival Wild Oats is being blocked by another US government agency, the Federal Trade Commission, which contended the deal would lead to too much concentration in the organic and natural foods market. Whole Foods said it would challenge the FTC.

Revelations about Mackey's postings first appear to have surfaced from documents released by the Federal Trade Commission.

According to The Wall Street Journal, which first reported Mackey's online dabblings, Mackey, or "Rahodeb," posted one message which said Wild Oats's management "clearly doesn't know what it is doing ... OATS has no value and no future," among other musings on the two companies.

The Journal said the name Rahodeb is an anagram of the name of Mackey's wife, Deborah.

When another online contributor remarked about Mackey's haircut, visible in a photograph in a Whole Foods annual report, "Rahodeb" went on the defensive saying: "I like Mackey's haircut."

Mackey also praised his own leadership of Whole Foods, while still obscuring his identify from other online users of the stock-market forum.