SEC Charges Stryker A Second Time for FCPA Violations
Stryker Corp. agreed to pay a $7.8 million penalty and retain an independent compliance consultant to address repeated FCPA violations involving inadequate internal controls and inaccurate books and records for improper payments in India, China, and Kuwait, marking its second such SEC enforcement action.
The SEC charged Stryker Corp. with violating the books and records and internal accounting controls provisions of the Foreign Corrupt Practices Act due to failures in detecting improper payments in India, China, and Kuwait, with its India subsidiary maintaining inaccurate records. Stryker agreed to pay a $7.8 million penalty and retain an independent compliance consultant to review its anti-corruption policies, without admitting or denying the allegations. This follows a 2013 settlement in which Stryker paid $3.5 million in penalties plus over $9.7 million in disgorgement and interest for similar FCPA violations.
The Securities and Exchange Commission charged Stryker Corp. with violating the books and records and internal accounting controls provisions of the Foreign Corrupt Practices Act, marking the second time the company has been sanctioned for such failures. The SEC found that Stryker’s internal controls were insufficient to detect improper payments made through its subsidiaries in India, China, and Kuwait, and that its India subsidiary failed to maintain accurate financial records. Without admitting or denying the allegations, Stryker consented to a cease-and-desist order and agreed to pay a $7.8 million penalty, in addition to retaining an independent compliance consultant to evaluate and strengthen its policies regarding third parties such as dealers, agents, and distributors. This enforcement action follows a 2013 settlement in which Stryker paid $3.5 million in penalties, more than $7.5 million in disgorgement of ill-gotten gains, and over $2.2 million in interest—totaling over $13.2 million in financial consequences for similar FCPA violations. The SEC emphasized that Stryker’s repeated failures were unacceptable and that the penalty and consultant requirement were necessary to ensure reform. The investigation was conducted by SEC staff from the New York and Washington, D.C. offices, supervised by Sanjay Wadhwa. The case underscores the SEC’s continued focus on corporate accountability for international bribery and weak internal controls.
Exhibits & Attached Documents (1)
Extracted insights
- $7.80M $7.8 million $1M–$10M
- $7.50M $7.5 million $1M–$10M
- $3.50M $3.5 million $1M–$10M
- $2.20M $2.2 million $1M–$10M
- agency director of sec's new york regional office
- person marc p. berger
- person Sanjay Wadhwa
- agency sec investigation from new york office
- agency sec investigation from washington d.c.
- agency Securities and Exchange Commission
- company stryker corp.
- SEC charged Stryker Corp. with violating FCPA books and records and internal accounting controls provisions
- Stryker Corp. agreed to settle charges and pay $7.8 million penalty
- Stryker Corp. violated FCPA books and records and internal accounting controls provisions
- Stryker's India subsidiary failed to maintain complete and accurate books and records
- Stryker Corp. had insufficient internal accounting controls to detect improper payments in India, China, and Kuwait
- Stryker Corp. paid $7.8 million penalty
- Stryker Corp. settled FCPA charges in October 2013 and paid $3.5 million penalty plus $7.5 million disgorgement plus $2.2 million interest
- Stryker Corp. must retain independent compliance consultant to review internal controls and anti-corruption policies
- Marc P. Berger is Director of SEC's New York Regional Office
- William Martin, Brenda Wai Ming Chang, Thomas P. Smith Jr. conducted SEC investigation from New York office
- Devon A. Brown, Andrew Shirley, Brian O. Quinn conducted SEC investigation from Washington D.C.
- Sanjay Wadhwa supervised the case
The Securities and Exchange Commission today charged Stryker Corp. with violating the books and records and internal accounting controls provisions of the Foreign Corrupt Practices Act (FCPA), the second time the SEC has brought an FCPA action against the Michigan-based medical device company. Stryker agreed to settle the charges and pay a $7.8 million penalty. The SEC’s order found that Stryker’s internal accounting controls were not sufficient to detect the risk of improper payments in sales of Stryker products in India, China, and Kuwait, and that Stryker’s India subsidiary failed to maintain complete and accurate books and records. “Stryker’s failures to implement sufficient internal accounting controls and keep accurate books and records are unacceptable, especially as this is not the first time the company has been charged for these types of violations,” said Marc P. Berger, Director of the SEC’s New York Regional Office. “The penalty ordered along with the imposition of a compliance consultant are appropriate and necessary.” Without admitting or denying the SEC’s findings, Stryker consented to the entry of an order requiring the company to cease and desist from committing violations of the books and records and internal accounting controls provisions of the FCPA and pay a $7.8 million penalty. In October 2013, Stryker settled charges of FCPA violations and was required to pay a $3.5 million penalty plus more than $7.5 million in disgorgement of ill-gotten gains and more than $2.2 million in interest. Stryker also must now retain an independent compliance consultant to review and evaluate its internal controls, record-keeping, and anti-corruption policies and procedures relating to use of dealers, agents, distributors, sub-distributors, and other such third parties that sell on behalf of Stryker. The SEC’s investigation was conducted by William Martin, Brenda Wai Ming Chang, and Thomas P. Smith Jr. of the New York office and Devon A. Brown, Andrew Shirley, and Brian O. Quinn out of Washington D.C. The case was supervised by Sanjay Wadhwa.
The Securities and Exchange Commission today charged Stryker Corp. with violating the books and records and internal accounting controls provisions of the Foreign Corrupt Practices Act (FCPA), the second time the SEC has brought an FCPA action against the Michigan-based medical device company. Stryker agreed to settle the charges and pay a $7.8 million penalty. The SEC’s order found that Stryker’s internal accounting controls were not sufficient to detect the risk of improper payments in sales of Stryker products in India, China, and Kuwait, and that Stryker’s India subsidiary failed to maintain complete and accurate books and records. “Stryker’s failures to implement sufficient internal accounting controls and keep accurate books and records are unacceptable, especially as this is not the first time the company has been charged for these types of violations,” said Marc P. Berger, Director of the SEC’s New York Regional Office. “The penalty ordered along with the imposition of a compliance consultant are appropriate and necessary.” Without admitting or denying the SEC’s findings, Stryker consented to the entry of an order requiring the company to cease and desist from committing violations of the books and records and internal accounting controls provisions of the FCPA and pay a $7.8 million penalty. In October 2013, Stryker settled charges of FCPA violations and was required to pay a $3.5 million penalty plus more than $7.5 million in disgorgement of ill-gotten gains and more than $2.2 million in interest. Stryker also must now retain an independent compliance consultant to review and evaluate its internal controls, record-keeping, and anti-corruption policies and procedures relating to use of dealers, agents, distributors, sub-distributors, and other such third parties that sell on behalf of Stryker. The SEC’s investigation was conducted by William Martin, Brenda Wai Ming Chang, and Thomas P. Smith Jr. of the New York office and Devon A. Brown, Andrew Shirley, and Brian O. Quinn out of Washington D.C. The case was supervised by Sanjay Wadhwa.