Industryweek 10314 Monsantologo

Monsanto Fined $80 Million for Accounting Violations

Feb. 10, 2016
Monsanto undercounted rebate payments in 2009, 2010 and 2011 that boosted revenues of the herbicide Roundup, the SEC said.

NEW YORK - Monsanto will pay an $80 million penalty to settle charges it misstated earnings by failing to accurately count rebate costs for a best-selling weed killer, U.S. securities regulators announced Tuesday.

Monsanto undercounted rebate payments in 2009, 2010 and 2011 that boosted revenues of the herbicide Roundup and, as a result, "materially misstated its consolidated earnings in corporate filings during a three-year period," the Securities and Exchange Commission said in a statement.

"Corporations must be truthful in their earnings releases," said SEC Chair Mary Jo White. 

"This type of conduct, which fails to recognize expenses associated with rebates for a flagship product in the period in which they occurred, is the latest page from a well-worn playbook of accounting misstatements."

The moves meant Monsanto counted $44.5 million in rebate payments in 2010 that should have been recorded in 2009. Monsanto counted $48 million in rebate costs in 2011 that should have been assessed in 2010, the SEC said.

The SEC also settled administrative proceedings against two Monsanto accounting executives, Sara Brunnquell and Anthony Hartke, who agreed to pay penalties of $55,000 and $50,000, respectively. A former Monsanto sales executive, Jonathan Nienas, was fined $30,000.

The SEC also said Monsanto CEO Hugh Grant and former chief financial officer Carl Casale reimbursed Monsanto for $3.2 million and $728,843, respectively, in bonuses and stock awards received during the period when the accounting violations were committed.

The SEC found no evidence of personal misconduct by Grant or Casale.

"Monsanto is committed to operating its business with the utmost integrity and transparency and in compliance with all applicable laws and regulations," Monsanto said in a separate statement. "The company is pleased to put this matter behind it."

The accounting case dates back to 2011, when Monsanto announced it was restating its financial statements for 2009 through the third quarter of 2011 to accurately account for the rebate costs.

Copyright Agence France-Presse, 2016

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