Teva Pharmaceutical Subpoenaed By SEC in Bribery Charge

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As part of broad probe into potential violations of the 1977 Foreign Corrupt Practices Act, Israel-based Teva Pharmaceutical
TEVA
has received a subpoena from the Securities and Exchange Commission. The SEC is seeking documentation for possible bribery charges against the largest generic drug manufacturer. In a Reuters examination of U.S. filings by the SEC, Teva is just one of eight other drug companies that have been warned of potential financial liabilities related to corruption charges levied in overseas markets. The SEC's probe involves its Latin America dealings which states that under the Foreign Corruption Act, companies cannot bribe foreign officials in exchange to obtain business. In a Wall Street Journal report Teva said in the filing it was voluntarily conducting an investigation into, “certain business practices which may have FCPA implications”. An email sent by a Teva spokeswoman revealed, "These matters are in their early stages and no conclusion can be drawn at this time as to any likely outcomes," according to the Wall Street Journal. The SEC and the Department of Justice are working hand in hand to enforce the FCPA. Back in April, Bristol Meyer Squibb
BMY
were subpoenaed relating to a foreign bribery probe. A spokeswomen for Bristol-Meyers told Pharmalot.com, “SEC subpoena related to FCPA is a new disclosure; the Germany mention is not a new disclosure. We are not commenting on the FCPA disclosure beyond what is listed.” In 2011, Johnson & Johnson
JNJ
admitted to violations of anti-bribery law and paid $70 million to settle with the SEC. Criminal allegations that European doctors were receiving kickbacks from Johnson and Johnson under the U.N. Oil for Food Program were reported by Dow Jones. Also in 2011 pharmaceutical giant Pfizer Inc.
PFE
is in line to possibly pay $60 million to resolve bribery charges to win overseas business contracts. Last August, AstraZeneca
AZN
received a criminal indictment in Belgrade, Serbia over allegations that local employees offered alleged bribes to physicians at the Institute of Oncology and Radiology. There is a distinct pattern by the SEC and Department of Justice as they attempt to punish the blatant violations of the FCPA. Other companies that have acknowledged they have received subpoenas are Merck & Co
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MRK
and GalaxoSmithKline
GSK
. Teva is the latest drug maker to be caught in the anti-bribery dealings. Paying a fine in the range of $50 to $70 million is a slap on the wrist after having seen Teva's recent 6-K filing that showed second quarter earnings exceeded $220 million. For the top pharmaceutical giants, the SEC probes and fines have no dilatory effects on the company earnings. The drug maker's expansion into emerging markets has created tremendous income revenue. In pre-market trading Teva price is reported unchanged at $39.51 a share. Jeremy Levin, CEO at Teva indicated the company will be greater with budgetary discipline. Levin was instrumental in the turn around story at Bristol Meyers Squibb.
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Posted In: NewsLegalGlobalJeremy LevinU.S. Securities and Exchange Commission
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