DOC Extends Biomet's Deferred Prosecution
July 28, 2016 at 4:25 p.m.
By Jordan Fouts-
The extension, announced Friday, is to allow federal prosecutors another year to investigate whether Biomet helped bribe government officials in Mexico and Brazil. Biomet settled a bribery case in 2012 by paying $17 million and striking a three-year deferred prosecution agreement that withheld criminal charges so long as Biomet avoids further violations of the Foreign Corrupt Practices Act.
An independent external compliance monitor was appointed to review Biomet’s compliance with the agreement, mainly in relation to its international sales practices. The monitor’s term was also extended another year.
In October 2013, according to a Tuesday regulatory filing by Biomet disclosing the deferred prosecution extension, the company learned of alleged improprieties regarding its operations in Brazil and Mexico, including alleged improprieties that predated the agreement. After investigating both matters, Biomet terminated, suspended or disciplined certain employees and executives involved in addition to taking other measures, the filing states.
In April 2014, Biomet disclosed the matter to the independent compliance monitor, the DOJ and the Securities Exchange Commission. On July 2, the SEC issued a subpoena to Biomet requiring the company to produce certain documents relating to the matters, which remain under investigation by the DOJ, according to the Tuesday filing.
The DOJ has sole discretion under the deferred prosecution agreement to determine whether conduct by Biomet constitutes a violation or breach of the agreement, the filing states, and the department retains the right to bring further action against Biomet relating to the conduct in Brazil and Mexico. The DOJ could, among other things, revoke the deferred prosecution agreement or prosecute Biomet and/or the involved employees and executives.
Meanwhile, Reuters reported Wednesday that European Union antitrust regulators are set to give their own conditional approval to Zimmer's proposed $13.4 billion acquisition of Biomet, citing two people with knowledge of the matter.
Zimmer revised its concessions to the European Commission last month, saying they were generally consistent with an earlier package, and in December proposed selling one unicompartmental knee brand and one elbow brand in Europe, as well as one total knee brand in two European countries, according to Reuters.
Zimmer said in its March 11 announcement of the sale of $7.65 billion in senior notes that it intents to use the proceeds to finance a portion of the cash consideration for its Biomet purchase, payment of related fees and expenses and payment of a portion of Biomet parent company LVB Acquisition Inc.’s funded debt.
The merger is expected to close by or shortly after the end of the first quarter of 2015, subject to regulatory approvals, according to the announcement.[[In-content Ad]]
The extension, announced Friday, is to allow federal prosecutors another year to investigate whether Biomet helped bribe government officials in Mexico and Brazil. Biomet settled a bribery case in 2012 by paying $17 million and striking a three-year deferred prosecution agreement that withheld criminal charges so long as Biomet avoids further violations of the Foreign Corrupt Practices Act.
An independent external compliance monitor was appointed to review Biomet’s compliance with the agreement, mainly in relation to its international sales practices. The monitor’s term was also extended another year.
In October 2013, according to a Tuesday regulatory filing by Biomet disclosing the deferred prosecution extension, the company learned of alleged improprieties regarding its operations in Brazil and Mexico, including alleged improprieties that predated the agreement. After investigating both matters, Biomet terminated, suspended or disciplined certain employees and executives involved in addition to taking other measures, the filing states.
In April 2014, Biomet disclosed the matter to the independent compliance monitor, the DOJ and the Securities Exchange Commission. On July 2, the SEC issued a subpoena to Biomet requiring the company to produce certain documents relating to the matters, which remain under investigation by the DOJ, according to the Tuesday filing.
The DOJ has sole discretion under the deferred prosecution agreement to determine whether conduct by Biomet constitutes a violation or breach of the agreement, the filing states, and the department retains the right to bring further action against Biomet relating to the conduct in Brazil and Mexico. The DOJ could, among other things, revoke the deferred prosecution agreement or prosecute Biomet and/or the involved employees and executives.
Meanwhile, Reuters reported Wednesday that European Union antitrust regulators are set to give their own conditional approval to Zimmer's proposed $13.4 billion acquisition of Biomet, citing two people with knowledge of the matter.
Zimmer revised its concessions to the European Commission last month, saying they were generally consistent with an earlier package, and in December proposed selling one unicompartmental knee brand and one elbow brand in Europe, as well as one total knee brand in two European countries, according to Reuters.
Zimmer said in its March 11 announcement of the sale of $7.65 billion in senior notes that it intents to use the proceeds to finance a portion of the cash consideration for its Biomet purchase, payment of related fees and expenses and payment of a portion of Biomet parent company LVB Acquisition Inc.’s funded debt.
The merger is expected to close by or shortly after the end of the first quarter of 2015, subject to regulatory approvals, according to the announcement.[[In-content Ad]]
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