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Johnson & Johnson agrees to pay foreign corruption fines

By: News
Posted: 4/8/2011 9:05:00 AM
Referenced Stocks: JNJ

Johnson & Johnson ( JNJ ) will pay more than $70 million in fines and other expenses after the federal government charged it with bribing doctors in Europe and paying kickbacks to Iraq, the U.S. Securities and Exchange Commission announced on Friday.

The violations fall under the Foreign Corrupt Practices Act, which the SEC contends the New Brunswick, New Jersey-based pharmaceutical, consumer product and medical device company had pressed since at least 1998.

"The message in this and the SEC's other FCPA cases is plain - any competitive advantage gained through corruption is a mirage," according to Robert Khuzami, director of the SEC's enforcement division. "J&J chose profit margins over compliance with the law by acquiring a private company for the purpose of paying bribes, and using sham contracts, off-shore companies, and slush funds to cover its tracks."

William Weldon, chief executive officer, accepted responsibility, expressed regret and vowed changes will prevent the infractions from happening again.

"More than four years ago, we went to the government to report improper payments and have taken full responsibility for these actions," Weldon said in a statement. "We are deeply disappointed by the unacceptable conduct that led to these violations. We have undertaken significant changes since then to improve our compliance efforts, and we are committed to doing everything we can to ensure this does not occur again."