Israel’s Teva to pay more than $519 million to settle U.S. foreign bribe case
Linus Unah – Fourth Estate Contributor
washington, dc, United States (4E) – Israeli multinational pharmaceutical company Teva Pharmaceutical Industries Ltd. will pay more than $519 million to settle civil and criminal charges that it violated U.S. foreign-bribery law by paying bribes to foreign government officials in Russia, Ukraine, and Mexico.
The U.S. Securities and Exchange Commission’s (SEC) complaint alleged that Teva made more than $214 million in illicit profits in violation of violation of the Foreign Corrupt Practices Act, which prohibits the use of bribes for foreign officials to get or receive business.
The federal securities regulator said those bribes helped the company to increase its market share, regulatory and formulary approvals as well as “favorable drug purchase and prescription decisions.”
“As alleged in our complaint, Teva failed to devise and maintain proper internal accounting controls to prevent the company’s payments of bribes to win business in certain regions around the globe,” Stephanie Avakian , SEC’s enforcement unit deputy director.
Eric I. Bustillo , director of the SEC’s Miami regional office, added that these bribes were hidden as legitimate payments to distributors.
“While distributors can help companies navigate complex regulatory environments and provide valuable industry relationships, they also can create significant corruption risks for companies,” Bustillo noted.
Under the settlement, Teva will pay more than $236 million in disgorgement and interest to the SEC plus a $283 million penalty in a deferred prosecution agreement with the U.S. Department of Justice.
“While the conduct that resulted in this investigation ended several years ago, it is both regrettable and unacceptable, and we are pleased to finally put this matter behind us,” Teva’s President and chief executive officer Erez Vigodman said in a statement.
Teva must also retain an independent corporate monitor for at least three years, according to the SEC.
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