UPDATE 2-Monsanto to pay $80 mln in U.S. SEC settlement over Roundup earnings

(Updates with a comment from Monsanto (N:MON), more background)
By Sarah N. Lynch
WASHINGTON, Feb 9 (Reuters) - Monsanto Co MON.N will pay
$80 million to settle civil accounting violations after it
allegedly misstated its earnings in connection with its
top-selling Roundup product, U.S. securities regulators said on
Tuesday.
The Securities and Exchange Commission also said that three
accounting and sales executives have also agreed to settle
charges in connection with the case.
The SEC's case against Monsanto revolves around a corporate
rebate program designed to boost sales of Roundup, a popular
weed killer. The rebate program was created to combat rising
generic competition which threatened to cut into the company's
profits.
The agency said that Monsanto had insufficient internal
controls to account for millions of dollars in rebates that it
offered to retailers and distributors. It ultimately booked a
sizeable amount of revenue, but then failed to recognize the
costs of the rebate programs on its books.
That led the St. Louis-based agriculture company to
"materially" misstate its consolidated earnings for a three-year
period.
In a statement, the company said it fully reserved funds to
pay for the penalty in fiscal year 2015.
Monsanto added that it is not required to change any of its
historical statements because the company already previously in
2011 restated its financial statements for fiscal year 2009
through the third quarter of fiscal year 2011.
"Public companies need to have robust systems in place to
ensure that all of their transactions are recognized in the
correct reporting report," said Scott Friestad, the SEC's
associate director for the enforcement division.
In agreeing to settle, Monsanto neither admitted nor denied
the charges, which include fraud. The agency did not charge the
company with knowingly committing the violations.
Monsanto accounting executives Sara Brunnquell, Anthony
Hartke and then-sales executive Jonathan Nienas also each agreed
to pay penalties.
Brunnquell and Hartke will also be temporarily suspended
from acting as accountants for public companies.
Attorneys for Brunnquell and Hartke did not have any
immediate comment. An attorney for Nienas could not be
immediately reached.
The SEC said it did not uncover any personal misconduct by
Monsanto CEO Hugh Grant or former Chief Financial Officer Carl
Casale.
Grant and Casale previously reimbursed the company for cash
bonuses and stock awards they received during the periods the
violations occurred.