Coca-Cola settles in bitter taste test lawsuit

Posted: Thursday, October 09, 2003

ATLANTA Coca-Cola Co. has agreed to settle an embarrassing lawsuit for $540,000, but federal authorities are still investigating fraud allegations raised by the case.

Former finance manager Matthew Whitley sued in May for wrongful termination, accusing the world's largest beverage maker of rigging a marketing test three years ago to inflate the popularity of Frozen Coke at Burger King restaurants in Virginia.

In a joint statement Tuesday, Coke and Whitley said they had settled their disputes.

Investigations by the Justice Department and the Securities and Exchange Commission continue but Whitley, who has turned over records following a grand jury subpoena, has not appeared before the panel, according to sources familiar with the probe.

Coke and Whitley would not discuss the investigations.

A spokesperson for the U.S. attorney in Atlanta did not return a call Tuesday.

Whitley and Coke said both would continue to cooperate in the federal investigations.

Whitley was laid off in March, a month after he says he sent a memo to company president Steve Heyer detailing allegations of widespread fraud at Coke.

His allegations have led to theongoing criminal investigation.

Coke has said Whitley was laid off as part of a restructuring.

Coke has admitted undermining the marketing test, and has said that the employees involved in the test were disciplined.

Burger King invested $65 million in Frozen Coke after the marketing test, according to the suit. Coke offered Burger King $21 million as part of an apology, and the Coke executive who oversaw the division responsible for the test stepped down in August.

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