Penn Traffic Signs Agreement with U.S. Attorney

ELLIOT ZWIEBACH

SYRACUSE, N.Y. — Penn Traffic Co. here said yesterday it has reached a non-prosecution agreement with the U.S. Attorney’s office for the Northern District of New York in connection with the office’s ongoing investigation into the company’s accounting practices between 2001 and 2004. As with the settlement Penn Traffic reached earlier this month with the Securities and Exchange Commission in its related investigation, the agreement imposes no fines or monetary penalties on Penn Traffic. The company said the agreement applies only to Penn Traffic and does not address investigations into the activities of two of its former marketing executives, who were terminated in 2006 following an investigation by the chain’s internal audit committee. As part of the non-prosecution agreement, Penn Traffic said it accepted responsibility for the conduct of its employees during the relevant time period and agreed to cooperate with the U.S. Attorney in its ongoing investigations of the matter. As previously reported, the chain said it has reformed its internal controls, policies and procedures related to accounting and has conducted companywide compliance training.

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