Sunday, April 10, 2011
On April 7 the SEC announced a settlement with Johnson and Johnson (“J&J”) to resolve SEC charges that the global pharmaceutical, consumer product, and medical device company violated the Foreign Corrupt Practices Act (FCPA) by bribing public doctors in several European countries and paying kickbacks to Iraq to illegally obtain business. According to the SEC, since at least 1998, J&J’s subsidiaries paid bribes to public doctors in Greece who selected J&J surgical implants, paid bribes to public doctors and hospital administrators in Poland who awarded tenders to J&J, and paid bribes to public doctors in Romania to prescribe J&J pharmaceutical products. J&J also paid kickbacks to Iraq in order to obtain contracts under the United Nations Oil for Food Program (“Program”).
J&J has agreed to pay more than $48.6 million in disgorgement and prejudgment interest to settle the SEC’s charges and to pay a $21.4 million fine to the U.S. Department of Justice to settle criminal charges. A resolution of a related investigation by the United Kingdom Serious Fraud Office is anticipated.
The SEC's release states that J&J voluntarily disclosed some of the violations by its employees, and conducted a thorough internal investigation to determine the scope of the bribery and other violations, including proactive investigations in more than a dozen countries by both its internal auditors and outside counsel.