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Postings by Whole Foods CEO said to interest SEC

July 14, 2007|From Bloomberg News

The Securities and Exchange Commission began an informal inquiry into comments that Whole Foods Market Inc. Chief Executive John Mackey made about the company and its competitors in an Internet chat room, a person with knowledge of the probe said.

Mackey posted anonymous messages on Yahoo Inc.'s financial chat boards from 1999 to 2006 using the name "rahodeb," an anagram for Deborah, his wife's name. Some of his postings, which exceeded 1,000, praised Whole Foods' stock while criticizing the company's rivals, including Wild Oats Markets Inc., which Whole Foods is seeking to acquire.

Wild Oats "had lost their way" and was "floundering," he said in a message posted March 28, 2006.

Whole Foods is the largest U.S. natural-foods grocer, and Wild Oats is No. 2. Whole Foods offered in February to buy Wild Oats for $565 million.

In a March 10, 2006, posting, "rahodeb" touted Whole Foods' growth plans and said the company might top a sales goal it announced a month earlier.

"The upgraded prediction of $12 billion is most likely conservative," he wrote. "Won't surprise me if the number ends up closer to $14 billion in 5 years."

Later that year, he predicted further gains for the stock in the event that the company maintained its compound annual growth rate of sales.

The identity of "rahodeb" was disclosed in court documents released this week by the Federal Trade Commission, which has moved to block the Wild Oats acquisition.

John Nester, an SEC spokesman in Washington, declined to comment on the inquiry.

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