Elanco Animal Health has signed a consent agreement with the Securities and Exchange Commission (SEC) that enjoins the Company from making false or misleading statements and to abide by Federal securities laws and to pay a $15 million penalty. 

The SEC alleged that following the spin-off from Eli Lilly and company in late 2018, Elanco Animal Health embarked on a program of artificially enhancing revenue, especially during 2019 and 2020.  The company offered incentives to distributors, effectively “stuffing the pipeline” to generate sales figures to support projections.  The SEC contends that by not disclosing the incentives, the company was misleading investors.

The scheme came to an end during the COVID years when it ceased offering incentives and sales dropped sharply.  The company then attributed the loss in revenue to the effect of COVID but this was, in fact, a misrepresentation.

Reports on quarterly filings by Elanco animal Health can be retrieved by entering “Elanco” into the SEARCH feature.  EGG-NEWS has commented on the losses posted by the company over the years that belied the optimism expressed by the CEO in his comments accompanying quarterly reports.

In terms of the SEC settlement, Elanco did not admit to or deny findings but agreed to desist from any future violations of Federal securities law.