NEW YORK ( TheStreet) -- As Monsanto ( MON) continues to regroup following a sluggish 2010 with strong third-quarter earnings, yet more trouble has bloomed for the controversial producer of genetically modified seeds.

Buried in a press release that otherwise struck happy tones about the company's financial turnaround, Monsanto disclosed that the Securities and Exchange Commission has launched an investigation into the "customer incentives" programs it has used to win sales for its Roundup-branded herbicide.

Roundup was once the company's bread-and-butter product. But competition from generic competitors in China -- the product came off patent some years ago -- has torpedoed sales of the weedkiller, which had been a high profit margin business.

Since it was acquired and then spun off from Pharmacia in 2000, Monsanto has redirected its business away from chemicals and toward bioengineered seeds and traits. Its business model, though, remains Roundup-dependent: One of the key selling points for its major seed product lines -- corn and soybeans, in particular -- is that they have been genetically modified to be resistant to Roundup, which is based on a chemical known as glyphosate.

According to Monsanto, the SEC "is conducting an investigation regarding Monsanto's customer incentive programs relating to its glyphosate products in fiscal years 2009 and 2010, and Monsanto has received a subpoena for documents in connection therewith. Monsanto is cooperating with the staff's investigation."

By "customer," Monsanto is referring to distributors of agricultural products, not the farmer end-users of the herbicide.

On the company's conference call to discuss third-quarter results, CEO Hugh Grant repeated the company's prepared statement and declined to comment further "out of respect for the SEC's process."

In reply to a question from an analyst, Grant said that the SEC's probe was not directed at its seed business.

As it turns out, the Roundup business appears to have rebounded for Monsanto of late, at least judging by its third-quarter numbers. The company's "agricultural productivity" segment took in sales of $943 million during the quarter, up from $600 million in year-ago period. Meanwhile, Monsanto said that the segement's gross profit would come to $700 million for the full fiscal 2011.

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