Thursday, June 16, 2005

Deferred Prosecution for Bristol Myers Squibb for Fraud Charges

The NY Times reported that federal prosecutors will defer prosecution of Bristol Myers Squibb for alleged manipulation of inventory designed to artificially inflate sales. The company will return $300 million to stockholders; set up an endowed chair of business ethics at Seton Hall University Law School; remove its CEO, Peter R. Dolan, from his additional position as chairman of board; and allow a retired federal judge to continue monitoring company operations, and appoint an additional board member acceptable to him. If the company complies with all obligations to the government, the prosecutors will dismiss criminal complaints already filed without further prosecution.
Two former Bristol Myers Squibb executives, former chief financial officer Frederick S. Schiff, and Richard J. Lane, former head of worldwide medicines, were indicted on charges of conspiracy and securities fraud. Lawyers for both men declared their innocence.
The prosecutors stated that these events resulted from a "corporate culture at Bristol-Myers at the time that emphasized higher sales at all costs...." according to the Times.

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