Johnson & Johnson to pay $70 million to settle SEC charges of foreign bribery, kickbacks

Johnson & Johnson agreed Friday to pay $70 million to settle charges made by the US Securities and Exchange Commission that the company's subsidiaries bribed physicians in several European countries and paid kickbacks to Iraq to illegally obtain business. Commenting on the news, CEO William Weldon noted that "we are deeply disappointed by the unacceptable conduct that led to these violations," adding that the company has "undertaken significant changes…to improve our compliance efforts, and we are committed to doing everything we can to ensure this does not occur again."

The SEC alleged that since at least 1998, Johnson & Johnson subsidiaries violated the Foreign Corrupt Practices Act (FCPA) by providing public doctors and hospital administrators in Greece, Poland and Romania who ordered or prescribed the company's products with cash, inappropriate travel and other rewards. The US agency also claimed that the subsidiaries paid kickbacks to Iraq to obtain 19 contracts under the United Nations Oil for Food Programme.

As part of the settlement agreement, under which the drugmaker neither admitted to nor denied the SEC's allegations, Johnson & Johnson will pay more than $48.6 million in disgorgement and prejudgment interest, as well as a $21.4 million fine to settle parallel criminal charges made by the US Department of Justice. The SEC noted that a resolution of a related investigation by the UK Serious Fraud Office is anticipated shortly. In addition, the company has been ordered to comply with certain undertakings regarding the FCPA compliance programme.

To read more Top Story articles, click here.