Bristol-Myers to Pay $150M to Settle Accounting Fraud Charges
In settling the Commission's action, Bristol-Myers agreed to an order requiring it to pay $150 million dollars and perform numerous remedial undertakings, including the appointment of an independent adviser to review and monitor its accounting practices, financial reporting and internal controls.
Stephen M. Cutler, Director of the SEC's Division of Enforcement, said, "Bristol-Myers' earnings management scheme distorted the true performance of the company and its medicines business on a massive scale and caused significant harm to the company's shareholders. The company's conduct warrants a stiff civil sanction. As our investigation continues, we will be focusing on, among other things, those individuals responsible for the company's failures."
Timothy L. Warren, Associate Regional Director of the SEC's Midwest Regional Office, added, "For two years Bristol-Myers deceived the market into believing that it was meeting its financial projections and market expectations, when, in fact, the company was making its numbers primarily through channel-stuffing and manipulative accounting devices. Severe sanctions are necessary to hold Bristol-Myers accountable for its violative conduct, and deter Bristol-Myers and other public companies from engaging in similar schemes."
Bristol-Myers has agreed, without admitting or denying the allegations in the Commission's complaint, to the following relief:
- a permanent injunction against future violations of certain antifraud, reporting, books and records and internal controls provisions of the federal securities laws;
- disgorgement of $1;
- a civil penalty of $100 million;
- an additional $50 million payment into a fund for the benefit of shareholders;
- various remedial undertakings, including the appointment of an independent adviser to review, assess and monitor Bristol-Myers' accounting practices, financial reporting and disclosure processes and internal control systems.