The Securities and Exchange Commission (“SEC”) has awarded $22.4 million to a former Monsanto financial executive, the second-largest whistleblower bounty ever provided. This amount represents the whistleblower’s share of the $80 million penalty paid.
The anonymous whistleblower was a former Monsanto financial executive who reported violations of Generally Accepted Accounting Principles (“GAAP”) and misstatements of corporate earnings. These issues stemmed from poor internal controls surrounding rebates provided to retailers and distributors as incentives to sell the often maligned weed killer Roundup. Despite paying the penalty, Monsanto was not required to admit nor deny the allegations. However, it did agree to improve its accounting controls and engage an independent compliance monitor to review its procedures.
The whistleblower reportedly went to the SEC after first trying to resolve the issues internally. As discussed in this related article on whistleblower best practices, a well-run, external whistleblower hotline is probably the easiest and least expensive method to improve corporate governance and address such matters without an employee feeling the need to involve outside authorities.