Prosecuting Agency:
U.S. Securities and Exchange Commission
Type of Action:
SEC Administrative Proceeding
Docket or Case Number:
3-11517
Name of Prosecuting Attorneys:
Unknown
US Assisting Agencies: Unknown
Foreign Enforcement Action/Investigation: Unknown
Foreign Assisting Agencies: Unknown
Origin of the Proceeding:
Unknown
Whistleblower:
Unknown
Case Status:
Resolved
Summary
Schering-Plough Corporation ("Schering-Plough") is a New Jersey corporation with its headquarters in Kenilworth, New Jersey. Its common stock is registered with the Commission pursuant to Section 12(b) of the Exchange Act and is listed on the New York Stock Exchange. Thus, Schering-Plough is an issuer pursuant to the FCPA.
Schering-Plough Poland ("S-P Poland"), headquartered in Warsaw, Poland, is a branch office of Schering-Plough Central East AG, a wholly owned Swiss subsidiary of Schering-Plough that is headquartered in Lucerne Switzerland.
Between February 1999 and March 2002, S-P Poland paid 315,800 zlotys (PLN) (approximately $76,000) to the Chudow Castle Foundation, a charitable foundation. The Foundation's president was also a governmental official with the Silesian Health Fund, a Polish governmental body that, among other things, provided monies for the purchase of pharmaceutical products and influenced the purchase of those products by other entities. The payments to the charitable foundation were meant to induce the foundation's president to influence the purchase of Schering-Plough's pharmaceutical products through the Silesian Health Fund. None of the payments to the charity was accurately reflected in Schering-Plough's books and records. Additionally, Schering-Plough's system of internal accounting controls was inadequate to prevent or detect the improper payments.
On June 9, 2004, the SEC instituted cease and desist proceedings against Schering-Plough alleging violations of the books & records and internal controls provisions of the FCPA. Schering-Plough consented, without admitting or denying the Commission's findings, to cease and desist those violations and to hire an independent consultant to review the company's internal controls, record-keeping, and financial reporting policies and procedures with respect to FCPA compliance.
In a related enforcement action, on June 8, 2004, the SEC filed a single count complaint against Schering-Plough alleging violations of the Books & Records and Internal Controls provisions of the FCPA. On June 9, Schering-Plough entered into a Consent Agreement with the SEC. Under the agreement, Schering-Plough agreed to pay a civil fine of $500,000 but did not admit or deny the allegations in the complaint.
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