Cardinal Health pays SEC $8.8 million to settle China FCPA offenses
Cardinal Health
paid the SEC $8.8 million Friday to settle FCPA offenses related to a Chinese subsidiary that provided marketing services.
In an internal administrative order,
the SEC charged Cardinal Health with violating the FCPA’s books and records and internal accounting controls provisions.
Dublin, Ohio-based Cardinal Health
agreed to disgorged $5.4 million to the SEC, plus prejudgment interest of $916,887, and pay a civil penalty of $2.5 million.
Cardinal
entered the Chinese market in November 2010 when it acquired a company that was later re-branded as Cardinal China.
After it was acquired, Cardinal China
abruptly terminated at least two third-party marketing accounts amid allegations that they had been used to facilitate improper payments.
In one instance, a marketing account it administered for a UK- based pharmaceutical manufacturer was terminated in 2013 after Cardinal’s CEO received an internal report alleging that
Cardinal China employees were using the account to “bribe employees of China’s Center for Disease Control.”
Cardinal China also operated marketing accounts for a European supplier of non-prescription, over-the-counter dermocosmetic products for which Cardinal China was the exclusive distributor in China.
Cardinal employed 2,400 people on the European company’s behalf, the SEC said.
According to the SEC,
Cardinal determined that other marketing accounts should be terminated because of their significant FCPA-related compliance risks, but the company “inaccurately assessed the risks of the arrangements with the dermocosmetic company as minimal” and didn’t apply its full internal accounting controls to those accounts.
As a result, some critical employees didn’t receive FCPA and anti-bribery training, and weren’t properly supervised when they dealt with third parties in China.
The FCPA Blog
https://fcpablog.com/2020/02/28/cardinal-health-pays-sec-8-8-million-to-settle-china-fcpa-offenses/
SEC.gov | SEC Charges Cardinal Health With FCPA Violations