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Fresenius Medical Care Pays Approximately $232 Million To Resolve Its Long-Standing FCPA Scrutiny

fresenius

German healthcare firm Fresenius Medical Care AG (a company with American Depositary Receipt shares traded on the NYSE) has been under FCPA scrutiny since 2012 (no that is not a typo).

Today the DOJ and SEC announced (here and here) an approximate $232 million enforcement action ($84.7 million to the DOJ and $147 million to the SEC) against the company for alleged bribery schemes involving physicians and other healthcare personnel in Angola, Saudi Arabia, Morocco, Spain, Turkey, Gabon, Benin, Burkina Faso, Senegal, Ivory Coast, Niger, Cameroon China, Serbia, Bosnia, and Mexico.

While not specified in any of the resolution documents, the DOJ’s non-prosecution agreement and SEC’s administrative order make generic reference to the Angola and Saudi Arabia conduct involving ‘agents and employees utiliz[ing] the means and instrumentalities of U.S. interstate commerce, including the use of internet-based email accounts hosted by numerous service providers located in the United States.”

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Friday Roundup

Roundup

More on Major League Baseball’s FCPA scrutiny, Siemens, across the pond, ripple, and for the reading stack.

It’s all here in the Friday roundup.

MLB’s FCPA Scrutiny

This prior post highlighted Major League Baseball’s apparent FCPA scrutiny. According to this Sports Illustrated article:

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Stryker Joins The FCPA Repeat Offender Club

stryker

The end of September is traditionally an active period for Foreign Corrupt Practices Act enforcement as the SEC’s fiscal year comes to a close.

On the heels of yesterday’s Petrobras enforcement action (see here and here for prior posts), the SEC announced a $7.8 million enforcement action against medical device company Stryker for not having internal accounting controls “sufficient to detect the risk of improper payments in sales of Stryker products in India, China, and Kuwait” and because “Stryker’s India subsidiary failed to maintain complete and accurate books and records.”

In doing so, Stryker joins the list of FCPA repeat offenders (see here). As highlighted in this prior post, in 2013 Stryker resolved a $13.2 million enforcement action based on alleged conduct in Mexico, Poland, Romania, Argentina, and Greece.

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Another Week, Another Repeat FCPA Offender As Orthofix International Joins The Club

Orthofix

In 2012, Orthofix International N.V. (“Orthofix”), a limited liability orthopedic medical device company formed under the law of Netherlands Antilles with administrative offices in Lewisville, Texas and common stock traded on Nasdaq, resolved a $7.4 million Foreign Corrupt Practices Act enforcement action ($2.2 million via a DOJ deferred prosecution agreement, and $5.2 million via a settled SEC civil complaint) based primarily on the conduct of its wholly-owned Mexican subsidiary.

In an enforcement action that was expected (see here for the August 2016 post highlighting how Orthofix International was poised to join the FCPA repeat offender club), the SEC announced yesterday that the company agreed to pay $6 million in disgorgement and penalties to settle FCPA books and records and internal controls findings “when its subsidiary in Brazil schemed to use high discounts and make improper payments through third-party commercial representatives and distributors to induce doctors under government employment to use Orthofix’s products.”

This is the second instance in the past week of a company resolving a second FCPA enforcement action in the span of approximately five years (see here for the prior post regarding Zimmer Biomet).

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Danish Subsidiary Exposes Analogic To $14.9 Million Enforcement Action

analogic

Yesterday the DOJ and SEC announced (see here and here) a parallel Foreign Corrupt Practices Act enforcement action against medical device manufacturer Analogic Corp. and BK Medical ApS (Analogic’s Danish subsidiary) in which the entities agreed to pay approximately $14.9 million.

The conduct at issue involved alleged improper payments by BK Medical, primarily in Russia through distributors, and the government alleged that BK Medical took various steps to conceal its conduct from Analogic.

The enforcement action involved a DOJ non-prosecution agreement with BK Medical in which the company agreed to pay a $3.4 million criminal penalty and an SEC administrative order against Analogic in which the company agreed to pay approximately $11.5 million in disgorgement and prejudgment interest. In connection with the same administrative order, the SEC also announced that “Lars Frost, BK Medical’s former Chief Financial Officer, agreed to pay a $20,000 civil penalty to settle charges that he knowingly circumvented the internal controls in place at BK Medical and falsified its books and records.

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