The most recent fruit of the SEC Enforcement Division’s on-going efforts to find and bring financial reporting cases is against Monsanto Company and several individuals. It was announced on February 9, 2016. You can read the release here:
The case involves some of the classic financial reporting problem areas including revenue recognition, manipulation of expenses and ICFR.
The settlement includes fines for both the company and individuals as well as two officers being barred from SEC practice. Interestingly, the settlement also requires the company to hire a compliance consultant to deal with the enforcement related issues.
The CEO and CFO, while not named in the case, voluntarily repaid bonuses and share based payment awards that would not have been paid if financial results had not been manipulated. This was essentially a voluntary clawback. As a result, the SEC did not have to bring a case based on the clawback provisions of SOX.
As always, your thoughts and comments are welcome!