French pharmaceutical company settles FCPA action with SEC for $25.2 million

Financial Crimes FCPA SEC

On September 4, the SEC announced that a French pharmaceutical company had agreed to pay $25.2 million to settle FCPA charges related to payments made by company employees to healthcare professionals in Kazakhstan and the Middle East. According to the SEC’s order, from 2011 to 2015, employees of the company’s subsidiaries acted to provide things of value to foreign officials and healthcare professions “in order to improperly influence them and increase sales of [the company's] products.” Employees generated the funds for the illicit payments by submitting fake reimbursement claims for, among other things, travel and entertainment expenses, product samples, and clinical trial and consulting fees.

The SEC found that the company violated the internal accounting controls and recordkeeping provisions of the FCPA. The company agreed to pay a civil penalty of $5 million, $17.5 million in disgorgement, and $2.7 million in prejudgment interest, without admitting or denying the SEC’s findings. According to the press release, the chief of the SEC’s FCPA Unit, Charles Cain, called out bribery in the pharmaceutical industry as a continued significant problem.

The company announced in March 2018 that the DOJ had closed its FCPA investigation without bringing an enforcement action. See previous FCPA Scorecard coverage here and here.