Monsanto just keeps being forced to pay the piper. The mega-corp has lied to consumers about the safety of GM seed and their best-selling herbicide, and now it is being held accountable for stealing from and cheating its investors.
The company will pay an $80 million settlement to the US Securities and Exchange Commission (SEC) as a penalty for lying about earnings for glyphosate-riddled herbicide, Round Up. The SEC charges that Monsanto violated accounting rules and misstated company earnings as it pertained to its flagship product.
The SEC also reports that three accounting and sales executives have also agreed to settle charges in connection with the case.
The case orbits around a corporate rebate program designed to boost sales of Round Up. The rebate program was created to combat rising generic competition which threatened to cut into the company’s profits.
The St. Louis-based company misrepresented its earnings for a three-year period. The SEC accuses Monsanto of having insufficient internal controls to account for millions of dollars in rebates that it offered to retailers and distributors, ultimately booking a sizeable amount of revenue, but then failing to recognize the costs of the rebate programs on its books. In short – Monsanto cooked its books, and misrepresented the cost of doing business to its investors.
Monsanto said it fully reserved funds to pay for the penalty in fiscal year 2015, but that they are not required to change any of their historical statements because the company already restated its financial statements for fiscal year 2009 through the third quarter of fiscal year 2011.
Scott Friestad, the SEC’s associate director for the enforcement division, said:
“Public companies need to have robust systems in place to ensure that all of their transactions are recognized in the correct reporting report.”
Monsanto failed again, thinking it was above the law. This doesn’t bode well for a company whose earnings are already slowly tanking, leading to job cuts across the board.
Sources:
Finance.Yahoo
Reuters