Monsanto Co. ("Monsanto") has reached an agreement to pay $80 million to settle allegations that the company violated accounting rules and misstated earnings in connection to its herbicide, "Round Up." The payment of the fine comes without any admission of guilt.
The Securities and Exchange Commission ("SEC") has placed a "high priority" on financial reporting and disclosure cases, according to SEC Chair, Mary Jo White ("White"). White went further, challenging the SEC to remain vigilant by explaining, "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 tactic employed by Monsanto involved a $194 million loyalty program rebate that was accounted for in 2010 instead of 2009. The SEC reported that senior accounting executive, Sara M. Brunnquell, approved the improper accounting maneuver.
Apart from an $80 million fine, Monsanto will hire an independent ethics and compliance consultant. The consultant will look at Monsanto's internal controls and make recommendations to better company polices. In addition, two executives were suspended from appearing before the SEC as accountants for a specific time period and three executives agreed to pay a total of $135,000 in fines.
Monsanto is not out of the woods yet. It's "Round Up" is the frequent subject among health and safety officials because it may contain carcinogens that can cause health problems in humans. The California Environmental Protection Agency has attempted to add the main ingredient of "Round Up" to its list as a carcinogen.
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