SEC Subpoenas Biomet on Alleged Improprieties
July 28, 2016 at 4:25 p.m.
By Jordan Fouts-
Biomet disclosed to the SEC and the Department of Justice in April that it had become aware of “certain alleged improprieties” regarding its operations in Brazil and Mexico in October, according to a filing with the SEC. Biomet investigated both allegations and then “terminated, suspended or otherwise disciplined certain of the employees and executives involved in these matters,” and took other actions, the filing states.
The DOJ will determine if Biomet’s conduct violates a deferred prosecution agreement from March 2012, when the company agreed to pay a $17.2 million criminal penalty to the DOJ and to give up $5.4 million in profits in a separate settlement with the SEC. The settlements followed an investigation by the two agencies into potential violations of the Foreign Corrupt Practices Act within the medical device industry.
The agencies say that between 2000 and 2008, Biomet and its subsidiaries paid more than $1.5 million in direct and indirect corrupt payments to employees of state-owned health care providers in Argentina, Brazil and China in order to secure business with hospitals, according to court documents cited by the Wall Street Journal. The company used phony invoices to disguise the payments, the court documents state.
Under the terms of the deferred prosecution agreement, Biomet is “permanently enjoined” from violating the FCPA.
The DOJ has discretion to extend or revoke the agreement or prosecute Biomet, the involved employees or executives, according to the recent filing, which also states that Biomet is cooperating with the two agencies and expects discussions to continue.[[In-content Ad]]
Biomet disclosed to the SEC and the Department of Justice in April that it had become aware of “certain alleged improprieties” regarding its operations in Brazil and Mexico in October, according to a filing with the SEC. Biomet investigated both allegations and then “terminated, suspended or otherwise disciplined certain of the employees and executives involved in these matters,” and took other actions, the filing states.
The DOJ will determine if Biomet’s conduct violates a deferred prosecution agreement from March 2012, when the company agreed to pay a $17.2 million criminal penalty to the DOJ and to give up $5.4 million in profits in a separate settlement with the SEC. The settlements followed an investigation by the two agencies into potential violations of the Foreign Corrupt Practices Act within the medical device industry.
The agencies say that between 2000 and 2008, Biomet and its subsidiaries paid more than $1.5 million in direct and indirect corrupt payments to employees of state-owned health care providers in Argentina, Brazil and China in order to secure business with hospitals, according to court documents cited by the Wall Street Journal. The company used phony invoices to disguise the payments, the court documents state.
Under the terms of the deferred prosecution agreement, Biomet is “permanently enjoined” from violating the FCPA.
The DOJ has discretion to extend or revoke the agreement or prosecute Biomet, the involved employees or executives, according to the recent filing, which also states that Biomet is cooperating with the two agencies and expects discussions to continue.[[In-content Ad]]
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