SEC Investigates Biomet for Possible Violations of the Foreign Corrupt Practices Act
BY LAUREN UZDIENSKI, OCTOBER 12, 2007
Biomet announced yesterday in a preliminary earnings release for FQ1:08 that the company was under investigation for possible violations of the Foreign Corrupt Practices Act (FCPA). The investigation was said to be informal and involve other companies in addition to Biomet, though no other orthopedic device manufacturers have spoken publicly on the SEC's probe.
Though there was no comment on the specific nature of the concerns, the primary aim of the FCPA is to prevent U.S. companies from making payments to foreign officials to obtain or maintain business.
The FCPA inquiry is not related to the $311 million settlement reached two weeks ago by Zimmer, Biomet, Smith & Nephew, Depuy and Stryker following an investigation into payments to physicians for consulting services. That case was resolved with deferred prosecution agreements and monetary payments for ZMH, BMET, SNN and Depuy. Stryker entered a non-prosecution pact and will not pay fines. The companies admitted no wrongdoing, consented to corporate monitoring and implemented reforms.
Update: Medtronic, Smith & Nephew, Stryker and Zimmer have disclosed that they too are being investigated for possible FCPA violations.
