Thursday, February 11, 2016


Monsanto to pay $80 million civil penalty for Roundup-related accounting violations

Securities and Exchange Commission slapped Monsanto with penalty for violating accounting rules and misstating past earnings related to its weedkiller Roundup
1. Monsanto CEO returns $3 million in bonuses after accounting error
2. Monsanto to pay $80 million civil penalty for Roundup-related accounting violations

1. Monsanto CEO returns $3 million in bonuses after accounting error

by Ahiza Garcia
CNN, Feb 10 2016

* This CEO is giving back to his company in a big way

Monsanto (MON) CEO Hugh Grant voluntarily returned more than $3 million in bonuses and stock awards after an SEC [Securities and Exchange Commission] investigation found Monsanto had misstated earnings from its Roundup herbicide.

Former CFO Carl Casale also returned over $700,000 that he received during the years in which earnings were misrepresented.

The SEC investigation didn't take issue with either Grant or Casale individually, or require them to return the money. But it did find that three accounting and sales executives were at fault, each of whom were forced to pay a penalty of between $30,000 and $55,000.

Monsanto didn't admit any wrongdoing, but it has been ordered to pay an $80 million fine.

The agency found that Monsanto failed to account for the operating costs of a rebate program that ran from 2009 to 2011. The program was intended to help boost sales that were being hurt by competition from cheaper, generic herbicides.

The program seemed to help sales get back on track, but that's because Monsanto wasn't taking into account how much the program cost.

"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," SEC Chair Mary Jo White said.

The St. Louis-based agriculture company has also been ordered to hire a compliance consultant to ensure future financial reporting is accurate.

2. Monsanto to pay $80 million civil penalty for Roundup-related accounting violations

Lisa Brown
St. Louis Post-Dispatch, 10 Feb 2016

The Securities and Exchange Commission slapped Monsanto with an $80 million civil penalty for violating accounting rules and misstating past earnings related to rebates on its flagship weedkiller Roundup. Two accounting executives and a retired sales executive also agreed to pay penalties to settle the charges.

And while the SEC found no personal misconduct by Monsanto CEO Hugh Grant, the biotech seed giant disclosed Tuesday that Grant already had reimbursed the company $3.2 million in pay due to the restatement of corporate earnings in fiscal years 2009 through 2011.

The penalty is another black eye for the Creve Coeur-based company, which has had a number of high-profile setbacks in the past year.

During fiscal years 2009 to 2011, Monsanto booked “substantial” amounts of revenue from Roundup sales that had been spurred by the rebate programs, but the company failed to recognize all of the related costs in the proper year, the SEC said Tuesday.

By pushing costs into another year, the company boosted its profitability — on paper.

Corporations must be truthful in their earnings releases to investors to prevent misleading statements, SEC Chair Mary Jo White said in a statement.

“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,” White said.

As part of the settlement, Monsanto also agreed to retain an independent compliance consultant. Though settling the charges, Monsanto did not admit or deny the SEC allegations that it broke the law, according to the regulator’s press release.

Monsanto began the accounting shenanigans in 2009, when Roundup was facing intense competition. In that year, a flood of inexpensive, generic, Chinese-made glyphosate, the key ingredient in Roundup, hit the market.

Facing the prospect of a sharp decline in Roundup profits, Monsanto unleashed the rebate program to bolster sales.

Anthony Hartke developed and Sara Brunnquell approved talking points for the sales force to use when encouraging retailers to take advantage of the rebate program in the fourth quarter of fiscal 2009, the SEC said.

Both were accounting executives at the time, and the SEC said the two knew or should have known that the costs must be recorded that same year. But Monsanto delayed recognizing the costs until the following year, according to the regulator.

The company also offered rebates to distributors that hit agreed-upon volume targets that year, but then didn’t record those costs until 2010. Under one scheme, Monsanto sales executive Jonathan Nienas arranged payment of $44.5 million in rebates to two of its largest distributors.

Monsanto repeated the rebate program in 2010, and again improperly deferred the costs until 2011, the SEC said.

The SEC first began investigating the company for the accounting irregularities in 2011. Later that year, company restarted its earnings for the fiscal years 2009 and 2010, and the first three quarters of 2011.

“We have taken this matter very seriously and quickly moved in November 2011 to restate our financial statements … following an independent review of our accruals for customer incentive programs,” Monsanto said Tuesday in an emailed statement. “Today’s announced settlement does not require any changes to the company’s historical financial statements due to our proactive efforts.”

The company added that it fully cooperated with the SEC in its investigation.

The securities regulator also announced Tuesday that Hartke and Brunnquell were suspended from appearing and practicing before the SEC as accountants. Hartke also was fined $30,000, while Brunnquell was fined $55,000. Nienas was fined $50,000.

Hartke and Brunnquell “have been reassigned to different roles within the company,” while Nienas retired years ago, Monsanto told the Post-Dispatch.

The restatement led Grant and former CFO Carl Casale to reimburse the company for cash bonuses and certain stock awards they received during the restated periods.

Grant paid back $3.2 million and Casale returned $728,843. The company declined to say when the money was paid back.

During that three-year period, Grant earned $33.4 million in executive compensation, according to regulatory filings.

If the two executives hadn’t paid back the money, the SEC said it could have sued to invoke a “clawback” provision under Sarbanes-Oxley that requires executives to pay back compensation during periods when accounting misstatements occurred, even if the executives didn’t engage in misconduct.

Edward Jones equity analyst Matt Arnold said civil penalties by the SEC for accounting violations aren’t uncommon.

“It happens surprisingly often,” Arnold said. “It reflects the flexibility that exists with accounting rules — it’s as much a science as art, and it’s subject to interpretation when it comes to reporting these items.”

Wall Street appeared indifferent to the news. Monday’s stock edged up following the SEC’s announcement, closing Tuesday at $91.70 a share, up 0.5 percent from Monday’s closing price of $91.25.

“There will be no financial implications for shareholders to worry about,” Arnold said.

The company already had recorded the $80 million cost in its 2015 fiscal year.

Still, the penalty comes when Monsanto already hit a rough patch in the past 12 months.

In March, the cancer research arm of the World Health Organization declared glyphosate, Roundup’s key ingredient, as a probable carcinogen, a finding that the company is fighting. Five months later, Monsanto gave up on its efforts to take over Swiss rival Syngenta.

And as agricultural prices continue to tumble, the company announced the start of an aggressive cost-cutting program that will eventually slash 16 percent of its workforce over the next two years.

Wednesday, February 10, 2016


GREAT NEWS! Appeals Court To Hear Maui GMO Moratorium Case
submitted by Kate Griffiths 

In November 2014 more than 23,000 Maui residents voted for a GMO moratorium, to put a temporary halt on the open-air chemical experiments conducted by Monsanto in Maui County, until practices were concluded safe for the environment and human exposure.
Concerns about chemicals used and their combinations
Concerns about Pesticide exposure in children .
Concerns about the rise in Hawaii birth defects….
All led to Maui mamas coming out in force; speaking up, knocking on doors, holding Town Hall style meetings, organizing and raising money for the Shaka Movement, (so ads could counteract the over eight million spent by the group trying to kill the measure called the “Citizens Against the Maui County Farming Ban”), waving banners and posters on roadsides, marching in organized marches, handing out bumper stickers and hats and much more.
People watching from the outside were surprised when our county voted, and besides all the money spent by the agro-chemical propaganda ads, put the ‘aina and keiki first. However, none of us on the ground were surprised that Monsanto and Dow responded to the vote, with a legal challenge filed against the county to prevent implementation of the law.
One year later the GMO moratorium was still being held up in the courts after Judge Susan Mollway ruled against the GMO Moratorium last summer, stating the moratorium was “invalid and unenforceable” because it is preempted by state and federal law.
Well, this week was a good week!
The 9th Circuit Court accepted the SHAKA Movement Appeal!
Now SHAKA Movement can explain in the court why the injunction is (i) contrary to the public interest (as expressed in a general election), (ii) potentially causing continued irreparable harm to the environment, and (iii) invalidating legal rights explicitly affirmed under the State’s Constitution.
And the Chemical Industry’s Motion ( which was unopposed by the Maui County Public Officials) to Dismiss the GMO moratorium was DENIED!
The 9th Court also GRANTED a motion submitted by the Center for Food Safety (CFS) to file an additional brief as Amicus (or Friend of The Court). This brief, supported and encouraged by SHAKA will allow additional legal arguments as to why the decision by Judge Mollway should be overturned and the Moratorium Ordinance certified, implemented, and enforced. You can click here for a copy of the court’s order.
This is GREAT NEWS for the ‘aina, the keiki and Hawaii!

Image Credit: SHAKA Movement