DALLAS—Whole Foods Market Inc. said Tuesday that federal regulators and its own board of directors are investigating online postings by the chief executive, who apologized for his actions.
Chairman and CEO John Mackey, using the name “Rahodeb,” boasted about Whole Foods and attacked rival Wild Oats Markets Inc. on Internet financial sites.
“I sincerely apologize to all Whole Foods Market stakeholders for my error in judgment in anonymously participating on online financial message boards,” Mackey said Tuesday in a statement. “I am very sorry and I ask our stakeholders to please forgive me.”
Some of Mackey’s postings from 1999 to 2006 claimed that Wild Oats was overvalued and poorly run. This year, Whole Foods announced it would buy the Boulder, Colo.-based rival for about $565 million, but federal antitrust regulators won an injunction temporarily blocking the deal.
Whole Foods said it was contacted late Monday by staff of the Securities and Exchange Commission. The Austin-based company said planned to cooperate with the investigation.
The company also said its board formed a special committee to investigate Mackey’s postings. The committee hired the law firm of Munger, Tolles & Olson LLP as advisers.
The company said the board wouldn’t comment further until the internal investigation is completed.
The real identity of “Rahodeb” emerged last week. Whole Foods said Mackey’s online postings were among millions of documents that it turned over to the Federal Trade Commission for the goverment’s examination of the proposed Wild Oats purchase.
The FTC said a merger of the two largest organic grocers would cause prices to rise by concentrating too much power in one company. Whole Foods has countered that it faces lots of competition from mainstream grocers that also sell organic food.
In some of his postings, Mackey said stock of Wild Oats was overpriced and predicted that the company might be sold after falling into bankruptcy.
Legal experts have said it is unclear whether the postings violated securities laws. Regulators would have to prove that Mackey tried to manipulate stock prices of Whole Foods or Wild Oats. Some experts said the comments were more of an embarrassment than a legal problem for Whole Foods.
Whole Foods shares gained 13 cents to close at $39.97.
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