SEC Charges Stryker Corporation with FCPA Violations

In the Matter of Stryker Corporation, Admin. Proc. No. 3-15587.  On October 24, 2013, the SEC announced it filed a settled Foreign Corrupt Practices Act case against Stryker Corporation related to its subsidiaries’ alleged payments of bribes to doctors, health care professionals, and other government-employed officials.  According to the SEC’s Order Instituting Cease-and-Desist Proceedings (the “Order”), Stryker’s subsidiaries in Argentina, Greece, Mexico, Poland, and Romania made payments of about $2.2 million that were falsely described as legitimate expenses in the company’s books and records.  Stryker made about $7.5 million in profits as a result of the bribes.  The Order alleges that Stryker’s subsidiaries used third parties to make payments to win or maintain lucrative contracts for the sale of the company’s medical technology products.  According to the
SEC, Stryker’s subsidiary in Mexico directed a law firm to pay approximately $46,000 to a Mexican government employee in order to secure the winning bid on a contract.  In another instance, the company’s subsidiary in Greece made a “donation” of nearly $200,000 to a public university to fund a laboratory.  The SEC alleges that Stryker’s subsidiaries bribed officials by paying their expenses for trips that lacked any legitimate business purpose.  Without admitting or denying the charges, Stryker agreed to settle the case.  The Order requires Stryker to pay disgorgement of $7,502,635, prejudgment interest
of $2,280,888, and a penalty of $3.5 million.  Stryker also agreed to cease and desist from committing or causing any violations and any future violations of Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act.

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