Settlements

ST-311
Schering-Plough Corporation
Schering-Plough Corporation
United States
Securities and Exchange Commission
Poland
2004
06/09
Unknown
Legal Person
Civil
Consent to Cease-and-Desist Order
Civil Penalty
$500,000.00
$0
$0
$500,000
$0
Art.16, Art.23, Art.26
Art. 1, Art. 2, Art. 7, Art. 8
Falsification of books and records, Internal controls violations
No admission or denial of alleged offenses
Yes
According to the US Securities and Exchange Commission's litigation release, "The Commission's complaint alleges that, between February 1999 and March 2002, one of Schering-Plough's foreign subsidiaries, Schering-Plough Poland, made improper payments to a charitable organization called the Chudow Castle Foundation. The Foundation was headed by an individual who was the Director of the Silesian Health Fund during the relevant time. The health fund was a Polish governmental body that, among other things, provided money for the purchase of pharmaceutical products and influenced the purchase of those products by other entities, such as hospitals, through the allocation of health fund resources. According to the complaint, Schering-Plough Poland paid 315,800 zlotys (approximately $76,000) to the Chudow Castle Foundation to induce the Director to influence the health fund's purchase of Schering-Plough's pharmaceutical products. The complaint alleges that none of the payments made by Schering-Plough Poland to the Foundation was accurately reflected on the subsidiary's books and records. The complaint also alleges that the company's system of internal accounting controls was inadequate to prevent or detect the improper payments. Without admitting or denying the allegations in the complaint, Schering-Plough consented to pay a $500,000 civil penalty." In a related enforcement matter, Schering-Plough, without admitting or denying the allegations in the SEC complaint, consented to a cease and desist order enjoining the company from FCPA violations and other conditions. Schering-Plough Poland was a subsidiary of Schering-Plough Central East AG, a wholly owned Swiss subsidiary of Plough-Schering with headquarters in Lucerne, Switzerland. (Source: US Securities and Exchange Commission, Litigation Release No. 18740, June 9, 2004, Securities and Exchange Commission v. Schering-Plough Corporation, United States District Court for the District of Columbia, Civil Action No. 1:04CV00945 (PLF), "SEC FILES SETTLED ENFORCEMENT ACTION AGAINST SCHERING-PLOUGH CORPORATION FOR FOREIGN CORRUPT PRACTICES ACT VIOLATIONS," accessed at http://www.sec.gov/litigation/litreleases/lr18740.htm, and June 9, 2004 Complaint accessed at http://www.sec.gov/litigation/complaints/comp18740.pdf.