Top Menu

Archive | Healthcare Providers As Foreign Officials

GlaxoSmithKline Coughs Up $20 Million In SEC FCPA Enforcement Action Based On China Conduct


In this 2016 preview post, I noted that the end of September was likely to be an active period for FCPA enforcement.

Why? Because the SEC’s fiscal year ends on September 30th that’s why.

In the third SEC FCPA enforcement action of the week, the SEC announced this enforcement action in which GlaxoSmithKline plc (a U.K. company with shares traded on the NYSE) will cough up $20 million to resolve an administrative cease and desist order based on employees and agents of its China-based subsidiary and China-based joint venture providing various things of value to healthcare professionals in China.

Continue Reading

SEC Brings FCPA Enforcement Action Against Former Executive Of Harris Corp’s Dissolved Chinese Subsidiary


As highlighted in this prior post, in April 2011 Harris Corporation completed an acquisition of Carefx and in the process acquired its subsidiaries including Carefx China. In connection with its integration activities and the subsequent audit of the financials of the Carefx China operations, Harris Corp. became aware that certain entertainment, travel and other expenses in connection with the Carefx China operations may have been incurred or recorded improperly. In response, Harris Corp. voluntarily disclosed to the DOJ and SEC.

As highlighted in this prior post, a few months ago Harris Corp. disclosed that “during the second quarter of fiscal 2016, the DOJ advised us that they have determined not to take any action against us related to this matter.” The same disclosure stated that the company is “continuing to cooperate with the SEC regarding its investigation.”

In the meantime, earlier this week the SEC announced this administrative action finding that Jun Ping Zhang (pictured – a U.S. citizen and former Chairman and CEO of CareFx China who was terminated in mid-2012) violated the Foreign Corrupt Practices Act. Zhang is currently Senior Vice President, Product Innovation and Chief Technology Officer at MedeAnalytics. (See also here).

Continue Reading

Issues To Consider From The AstraZeneca Enforcement Action


This post summarized the recent SEC Foreign Corrupt Practices Act enforcement action against AstraZeneca in which the company, without admitting or denying the SEC’s findings, agreed to cough up $5.5 million.

This post continues the analysis by highlighting additional issues to consider.


In an August 9, 2010 filing, AstraZeneca first disclosed:

“AstraZeneca PLC has received inquiries from the US Department of Justice and the Securities and Exchange Commission in connection with an investigation into Foreign Corrupt Practices Act issues in the pharmaceutical industry. AstraZeneca is cooperating with their inquiries.”

Thus from start to finish, AstraZeneca’s FCPA scrutiny lasted over six years.

It is absolutely inexcusable on any level for FCPA scrutiny to last over six years. If the SEC wants the public to view its FCPA enforcement program as legitimate, credible, and effective, it must resolve instances of FCPA scrutiny much faster.

Continue Reading

AstraZeneca Coughs Up $5.5 Million To Resolve FCPA Action


Say an English company has Chinese and Russian subsidiaries which, approximately 6-10 years ago, provided various things of value to physicians in those countries.

The end result?

Why of course $5.5 million to the U.S. Treasury because the English company has American Depositary Shares registered with the SEC.

The above description is not make-believe, but a summary of a Foreign Corrupt Practices Act enforcement action released yesterday by the SEC against AstraZeneca Plc (a United Kingdom biopharmaceutical company).

Continue Reading

Issues To Consider From The Olympus Enforcement Action


This prior post went in-depth into the recent $22.8 million Foreign Corrupt Practices Act enforcement action against Olympus Latin American Inc.

This post continues the analysis by highlighting various issues to consider.

20th Enforcement Action

Certain people seem to be confused about the reasons why Foreign Corrupt Practices Act enforcement has generally increased over the past decade.

However, there are several practical (as well as provocative) reasons.

Among the more obvious practical reasons (no doubt it is provocative as well) is that in 2002 the FCPA enforcement agencies came up with the theory that employees (such as physicians, nurses, mid-wives, lab personnel, etc.) of certain foreign health care systems are “foreign officials” under the FCPA and thus occupy a status equal to Presidents, Prime Ministers, and other bona-fide foreign officials that Congress had in mind when passing the FCPA in 1977.

It is one of the more aggressive and dubious FCPA enforcement theories there is.  It has never been subjected to judicial scrutiny and perhaps most telling as to its validity and legitimacy, the DOJ has never charged an individual with an FCPA violation based on this theory.

Nevertheless, the theory is frequently used in FCPA enforcement actions and the Olympus enforcement action represents the 20th time it has been used in a corporate enforcement action.

Continue Reading

Powered by WordPress. Designed by WooThemes