Following a Securities and Exchange Commission investigation in which several international subsidiaries of Stryker (NYSE:SYK) were charged with making an estimated $2.2 million in "illicit payments," the SEC announced yesterday that Stryker has agreed to make an estimated $13.28 million payment to settle the matter.
The illicit payments, according to the SEC, resulted in profits of an estimated $7.5 million for the medical technology provider, and were in violation of the Foreign Corrupt Practices Act. The subsidiaries in question are located in Argentina, Romania, Greece, Mexico, and Poland, the SEC said, and the alleged violations included bribing doctors, government officials, and other health care professionals to "obtain or retain business."
The SEC press release says Stryker does not admit nor deny the allegations.
The investigation, Stryker said in a statement, began in 2007 when it was asked to provide documentation to the SEC and Department of Justice for alleged violations the SEC said began as early as 2003. The exact amount paid to settle the charges came to $13,283,523 which, according to Stryker, "includes amounts for disgorgement of profit, pre-judgment interest and a civil monetary penalty."
In addition to settling with the SEC, Stryker said it has been informed that the Department of Justice has also ended its concurrent investigation. A Stryker representative said the company has "enhanced its companywide anti-corruption compliance program that includes enhanced corporate policies and processes, financial controls and governance systems."
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