USA: SEC announces $112M settlement with Novartis for FCPA violations
The Securities and Exchange Commission ('SEC') announced, on 25 June 2020, that Novartis AG, had agreed to pay over $112 million to resolve charges that it violated the books and records and internal accounting controls of the Foreign Corrupt Practice Act ('FCPA'). In particular, the SEC Order ('the Order') states that, between 2012 and 2016, in South Korea, Vietnam, and Greece, Novartis or Alcon local subsidiaries engaged in schemes to make improper payments or to provide benefits to public and private health care providers in exchange for increased use of their products in said markets. Furthermore, the Order notes that, from 2013 to 2015, former Alcon Asia business' internal accounting control weaknesses associated with Equipment Financing Arrangements ('EFA') in China resulted in, among other things, forged contracts and significant EFA accounts receivable balance. As part of the Order, Novartis consented to comply with a three-year undertaking to self-report on the status of its remediation and implementation of compliance measures. Finally, the SEC outlined that subsidiaries of Novartis and Alcon entered into deferred prosecution agreements with the Department of Justice ('DOJ') and have agreed to pay more than $233 million in criminal fines in relation to the FPCA violations.