Two former P&C execs charged with financial fraud

SYRACUSE - Two fired executives of Penn Traffic Co., a regional grocer, have been charged with fraud for repeatedly inflating reported income through improper promotional allowances, federal regulators said Monday.

The Securities and Exchange Commission filed a complaint alleging the company's former chief marketing officer, Leslie Knox, and a former vice president, Linda Jones, orchestrated a scheme to inflate Penn Traffic's income and other financial results by prematurely recognizing promotional allowances.

Promotional allowances - also known as rebates, slotting fees or vendor allowances - are paid by vendors in exchange for various marketing and promotional activities, such as inclusion in a supermarket's weekly circular. U.S. Attorney Glenn Suddaby said a federal grand jury has handed up indictments against Knox and Jones on related criminal charges.