In re ALERE INC.

 UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES ACT OF 1933 
Release No. 10417 / September 28, 2017 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 81742 / September 28, 2017 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-18228 
 
 
In the Matter of 
 
ALERE INC., 
 
Respondent. 
 
 
ORDER INSTITUTING CEASE-AND-DESIST 
PROCEEDINGS, PURSUANT TO SECTION 
8A OF THE SECURITIES ACT OF 1933 AND 
SECTION 21C OF THE SECURITIES 
EXCHANGE ACT OF 1934, MAKING 
FINDINGS, AND IMPOSING A CEASE-AND-
DESIST ORDER  
   
 
I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate and in 
the public interest that public administrative and cease-and-desist proceedings be, and hereby 
are, instituted pursuant to Section 8A of the Securities Act of 1933 (“Securities Act”) and 
Section 21C of the Securities Exchange Act of 1934 (“Exchange Act”) against Alere Inc. 
(“Respondent”).   
 
II. 
 
 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 
purpose of these proceedings and any other proceedings brought by or on behalf of the 
Commission, or to which the Commission is a party, and without admitting or denying the 
findings herein, except as to the Commission’s jurisdiction over it and the subject matter of these 
proceedings, which are admitted, Respondent consents to the entry of this Order Instituting 
Cease-and-Desist Proceedings, Pursuant to Section 8A of the Securities Act of 1933 and Section 
21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist 
Order (“Order”), as set forth below.   
 

 
2 
III. 
 
 On the basis of this Order and Respondent’s Offer, the Commission finds
1
 that: 
 
Summary 
1. Alere is a Massachusetts-based public company, traded on the New York Stock 
Exchange, which manufactures and sells diagnostic tests for infectious disease, cardiometabolic 
disease and toxicology.  Alere maintains operations and sells its products around the world.  
Between 2011 and 2016, Alere engaged in the improper premature recognition of revenue in its 
financial statements filed with the Commission.  And, between 2011 and 2013, Alere’s 
subsidiary in Colombia improperly characterized payments to a Colombian government official 
in Alere’s books and records.  Alere’s subsidiary in India also failed to properly record certain 
payments made by a distributor in its books and records.  Alere further failed to devise and 
maintain a sufficient system of internal accounting controls.  As a result, Alere violated Sections 
10(b), 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 10b-5, 12b-20, 13a-1, 
13a-11, and 13a-13 thereunder, and Section 17(a) of the Securities Act.    
2. Since May 2015, Alere has at three different times revised or restated its financial 
statements that had appeared in the company’s periodic filings with the Commission.  In May 
2015, Alere restated its 2014 Form 10-K due to incorrect tax accounting.  In August 2016, Alere 
filed its 2015 Form 10-K, which revised the revenue and associated entries in its financial 
statements for prior periods due to incorrect reporting of revenue.  In June 2017, Alere filed its 
2016 Form 10-K, which restated its revenue and associated entries for prior periods due to newly 
discovered improper reporting of revenue.  In total, Alere has restated its financial statements for 
fiscal years 2013, 2014, and 2015 and for the following fiscal quarters:  Q3 2014, Q1-Q3 2015, 
and Q1-Q3 2016. 
3. Revenue Recognition Problems:  From 2011 to 2016, Alere misstated its 
revenue in its financial statements filed with the Commission.  These revenue misstatements 
resulted from (a) intentional early reporting of revenue by Alere’s South Korean subsidiary, 
Standard Diagnostics, and (b) improper revenue recognition practices by Alere at subsidiaries 
located, among other locations, in South Korea, Israel, South Africa, Ireland, and China.  The 
improper revenue recognition practices primarily related to the timing of when Alere could have 
recognized the revenue.  As a result, Alere’s revision and restatement of its revenue over the 
five-year period, shifted to a later reporting period in total over $260 million in revenue from the 
quarter in which it was originally recognized.  The revenue involved in “early sales” and other 
practices described below was eventually recognizable and collected, just not in the quarter in 
which it was recorded. 
4. Recording of Offers and Payments to Foreign Officials:  Between 2011 and 
2013, Alere’s foreign subsidiaries located in Colombia and India indirectly made improper offers 
                                                 
1
  The findings herein are made pursuant to Respondent’s Offer of Settlement and are not binding on any other 
person or entity in this or any other proceeding.  
 

 
3 
and payments to foreign government officials for the purpose of making sales of its products.  
Profits from the sales associated with the improper offers and payments totaled approximately 
$3.3 million.   
Respondent 
5. Alere Inc. is a Delaware corporation with its principal place of business in 
Waltham, MA.  It is a manufacturer of medical diagnostic testing equipment.  Alere’s common 
stock is registered pursuant to Section 12(b) of the Exchange Act and trades on the New York 
Stock Exchange under the symbol “ALR.” 
Other Relevant Entities 
6. Alere Colombia S.A. is a wholly-owned subsidiary of Alere formerly known as 
BioSystems, S.A. (“BioSystems”).  Alere Colombia sells Alere’s global products into the 
Colombian market.  Alere Colombia is located in Bogota, Colombia.  Biosystems was an 
independent distributor of Alere products until acquired by Alere. 
7. Standard Diagnostics, Inc. (“SD”) is a wholly-owned subsidiary of Alere.  Its 
main products test for diseases such as Malaria, Dengue, HIV, and Syphilis.  Standard 
Diagnostic’s principal office is located in Giheung-gu, South Korea.  Prior to 2010, Standard 
Diagnostics was an independent and publicly-traded company listed in South Korea.  Alere 
acquired, through a tender offer, a majority share of its stock in 2010. 
8. Alere Medical Private Ltd. (“Alere India”) is a wholly-owned subsidiary of 
Alere.  Alere India sells Alere’s global products into the Indian market.  Alere India’s principal 
office is located in Gurgaon, India.   
9. The VP of SD Sales, a resident and citizen of Korea, served as the head of SD’s 
sales and marketing departments from 2011 until 2016.  In 2013, he was also given the title of 
Vice President of Commercial Operations Africa.  During the entire time he was a management-
level employee working from an office in South Korea.  Alere intended to terminate the VP of 
SD Sales in 2015 based on conduct not related to the matters discussed herein, but postponed the 
termination to cooperate with ongoing government investigations.  The VP of SD Sales resigned 
in 2016. 
10. The SD Finance Director, a resident and citizen of Korea, served as the head of 
SD’s finance department from 2011 until 2017.  He was removed from his position following an 
internal investigation in 2017 and subsequently resigned. 
Facts 
11. During the 2000s and early 2010s, Alere grew quickly, in part because it acquired 
a number of foreign companies.  Alere’s corporate finance group required all these newly 
acquired companies to adopt Alere’s Revenue Recognition Policy. 
12. Alere’s Revenue Recognition Policy established standards and procedures to 
ensure that Alere recognized revenue in compliance with management’s objectives and U.S. 

 
4 
generally accepted accounting principles (“GAAP”).  Among other things, the policy stated that 
revenue should not be recognized until four basic criteria have been met:  “(1) persuasive 
evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) 
the fee is fixed and determinable; and (4) collection is reasonably assured.” More specifically, 
the policy stated that Alere recognizes revenue upon title transfer of the products to third-party 
customers. 
13. Alere’s corporate finance group delegated revenue recognition decision-making 
authority to Alere’s subsidiaries.  These subsidiaries entered their revenue information into local 
books and records, which were consolidated into Alere’s own books and records and used to 
create the financial statements that it filed with the Commission. 
Intentional False Reporting of Revenue at Alere’s South Korean-Subsidiary, SD 
14. In February 2010, Alere acquired a majority interest in SD.  Beginning with fiscal 
year 2010, SD’s financials were consolidated into Alere’s financial statements, which were filed 
in Alere’s Form 10-K. 
15. Beginning no later than 2011, the VP of SD Sales initiated a scheme to inflate 
SD’s revenue numbers at or near the end of reporting periods.  The VP of SD Sales and other SD 
employees wanted to accelerate revenue in order to meet African region sales quarterly and 
annual revenue targets.  The scheme involved recognizing revenue before delivery of the product 
had occurred in violation of Alere’s Revenue Recognition Policy and in contravention of GAAP.  
The practice came to be known amongst SD employees as “early sales.”       
16. “Early sales” were generally conducted in one of two ways: 
a. In the first scenario, the product remained undelivered in SD’s warehouse 
at the end of a quarter.  SD employees then intentionally created false 
delivery documents or falsified shipping documents to support a delivery 
date before the end of a quarter.  This falsified documentation was used to 
recognize the sale of product days or weeks earlier than its actual delivery.     
b. In the second scenario, immediately before the end of a quarter, SD would 
direct a shipping agent to pick up product and store it in the shipping 
agent’s warehouse until the customer requested delivery.  SD employees 
used the pick-up receipts from the shipping agent as proof of delivery to a 
customer.  This documentation was improperly used to recognize the sale 
of product days or weeks earlier than its actual delivery. 
17. The size of the transactions for which revenue was improperly recognized ranged 
from as small as $25,000 to greater than $2 million. 
18. To execute the scheme, the VP of SD Sales involved personnel from SD’s sales, 
marketing, customer service, and warehouse departments. 

 
5 
19. Over time, the number of sales transactions improperly recognized early each 
quarter grew, peaking in 2015.  In the fourth quarter of 2015, SD’s fraudulent “early sales” 
comprised approximately 29% of all the revenue SD reported that quarter.  This inflated revenue 
was incorporated in financial statements filed with Alere’s 2015 Form 10-K. 
20. Initially, the scheme did not directly involve employees within SD’s finance 
department.  But by the end of 2015, at least two individuals in SD’s finance department, the SD 
Finance Director and an SD Finance Manager, were aware of and complicit in “early sales.” 
21. During 2016, in response to issues with revenue recognition in China and Africa, 
Alere’s management conducted an internal assessment of revenue recognition practices 
throughout its subsidiaries.  During the assessment, the SD Finance Director and the SD Finance 
Manager intentionally concealed the “early sales” scheme from those conducting the assessment 
and Alere’s independent auditors. 
22. In fact, SD continued to prematurely recognize revenue during Alere’s ongoing 
assessment by improperly recognizing revenue from unconsummated sales on the last day of Q2 
and Q3 2016.  SD’s improper revenue recognition continued through Q4 2016. 
23. As a result of the conduct described above, Alere violated Section 10(b) of the 
Securities Exchange Act, Rule 10b-5 thereunder, which prohibit fraudulent conduct in 
connection with the purchase or sale of securities, and Section 17(a) of the Securities Act which 
prohibits fraudulent conduct in the offer and sale of securities.  This conduct also contributed to 
Alere’s violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 
12b-20, 13a-1, 13a-11, and 13a-13 thereunder, which require every issuer of a security registered 
pursuant to Section 12 of the Exchange Act to file with the Commission information, documents, 
and annual and quarterly reports as the Commission may require, and mandate that periodic 
reports contain such further material information as may be necessary to make the required 
statements not misleading. 
Failure to Conform Revenue Reporting to GAAP by Alere from 2013-2016 
Chinese “Bill and Hold” Transactions 
24. From Q4 2012 through Q1 2016, employees at an Alere subsidiary located in 
China recognized revenue from the sale of product that remained undelivered at the subsidiary’s 
warehouses.  The practice was called “postponement of delivery.” While customers agreed not to 
take delivery and submitted a “Declaration of Postponement” form to the subsidiary, the 
arrangement did not permit the recognition of revenue under applicable Bill & Hold guidance 
under GAAP.  From 2013 to 2016, the subsidiary entered into more than 3,800 “postponement of 
delivery” transactions associated with more than $28 million in revenue that was recognized in 
an earlier quarter than permissible under GAAP. 

 
6 
African Contingent Arrangements, Bill-and-Hold Transactions, and Revenue Cut-off 
Issues 
25. From at least 2013 through 2015, employees of Alere’s Africa commercial team 
entered into sales arrangements for which revenue was improperly recognized.  Sales included 
contingent arrangements,
2
 bill and hold transactions,
3
 and sales where product was stored at a 
third-party’s warehouse.  In addition, revenue from certain sales of Alere product to be used in 
Africa was improperly recognized due to cut-off issues and improper execution of or changes to 
shipping terms.   
26. Alere’s Africa commercial team included employees from Alere’s Israeli, South 
African, and Irish subsidiaries and employees from SD.  In general, commercial and finance 
personnel lacked a sufficient understanding of how such arrangements and shipping terms 
affected when Alere could recognize revenue under U.S. GAAP. 
27. These sales arrangements and issues led to Alere recognizing revenue of 
approximately $24 million in an earlier quarter than permissible under GAAP.   
African Distributor Sales Agreements 
28. From at least 2011 through 2015, employees of Alere’s Africa commercial team 
made sales to distributors operating in Africa pursuant to distributor sales agreements.  Many of 
the agreements with African distributors executed by Alere’s Israeli and South African 
subsidiaries contained a provision, a “Retention of Title” clause, that stated Alere retained title to 
the product until it was paid in full by the distributor.
4
  As written, the provision precluded Alere 
from recognizing revenue under GAAP until Alere received payment for the product from the 
distributor.  Finance personnel, however, either failed to review the Retention of Title clause in 
the agreements or were unaware of its implication for revenue recognition.   
29. Typically, Alere’s African distributor customers had at least 30 days to pay for 
products.  Lacking the resources and understanding of GAAP, Alere’s subsidiaries, recognized 
revenue upon delivery, often immediately before or at the end of a quarter, even though without 
payment this was not proper given the presence of the Retention of Title clause.   
30. As a result, Alere recognized more than $86 million in revenue from sales to 
African distributors in an earlier quarter than permissible under GAAP. 
                                                 
2
 Contingent arrangements do not become fixed or determinable until the contingency resolves, and thus, revenue 
may not be recognized until that time. 
 
4
 The distribution agreements generally included language stating that the distributor was holding the product for 
Alere and the product needed to be stored separately and labeled as Alere’s product and that Alere maintained the 
right to enter the distributors’ premises and remove its product. As such, these distributor arrangements were broad 
and therefore extended beyond the retention of title exemption contemplated in Staff Accounting Bulletin No. 104. 

 
7 
Other Revenue Recognition Issues 
31. In addition, from at least 2013 through 2015, Alere experienced wide-spread 
month or quarter end revenue cut-off issues at subsidiaries located around the world, including in 
Argentina, Australia, Brazil, China, Colombia, Japan, the United States, and Europe.  The 
various subsidiaries independently used similar improper quarter end cut-off procedures for 
revenue. 
32. As a result of the improper revenue recognition cut-off practices, Alere 
recognized approximately $97 million in revenue from non-African customers in an earlier 
quarter than permissible under GAAP. 
33. The conduct at Alere’s subsidiaries described above contributed to Alere’s 
violations of 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, 
13a-11, and 13a-13  thereunder, and Sections 17(a)(2) and (3) of the Securities Act. 
Improper Revenue Recognition Led to Required Restatements of Commission Filings 
and Revisions of Financial Statements and Assessments of the Effectiveness of Internal 
Control over Financial Reporting  
34. To correct the inaccurate revenue reporting summarized above, Alere revised and 
restated its financial statements. 
35. On February 26, 2016, Alere filed a Form 12b-25 with the Commission 
announcing a delay in the filing of its Form 10-K for the year ended December 31, 2015 due to 
management’s “analysis of certain aspects of revenue recognition in Africa and China and any 
potential implications on our evaluation of internal control over financial reporting for the year 
ended December 31, 2015.” 
36. Management completed its assessment of revenue recognition and filed with the 
Commission Form 10-K for 2015 on August 8, 2016. Alere reported: 
Based on our review, we determined that, in 2013 and 2014 and the first three quarters of 
2015, we had incorrectly recorded certain revenue transactions for such periods.  
Specifically, the errors in the application of U.S. GAAP rules regarding the timing of 
revenue recognition primarily relate to:  (i) transactions, principally in Africa, in which 
we recognized revenue when the product shipped to the distributor, but we contractually 
retained title in the products until the distributor paid for the products in full or the 
distributor was not obligated to pay us until the products were sold through to the end-
user; (ii) “bill and hold” transactions, principally in China, which did not meet the criteria 
for revenue recognition under U.S. GAAP; and (iii) other transactions, in which we 
recognized revenue prior to full satisfaction of all contractual criteria for title and risk of 
loss passing to the customer. 
37. Alere concluded that it had several material weaknesses in internal control over 
financial reporting related to revenue recognition: 

 
8 
a. We did not maintain a sufficient complement of resources at our 
subsidiaries with appropriate knowledge, experience and training to ensure proper 
application of US GAAP in determining revenue recognition. 
b. We also did not maintain effective controls over information and 
communications as it relates to revenue recognition at our subsidiaries.  Specifically, we 
did not implement and reinforce an adequate process for internally communicating 
nonstandard terms and conditions between our subsidiaries’ commercial operations and 
finance groups and between our subsidiaries’ finance groups and our corporate 
accounting group. 
c. We did not design effective controls over the review of terms of purchase 
orders and customer contracts, including amendments to contracts, to ensure proper 
application of US GAAP in determining revenue recognition. 
d. We did not design effective controls to ensure that revenue would not be 
recognized until title and risk of loss had passed to our customers. 
38. On March 1, 2017, Alere filed another Form 12b-25 with the Commission, 
announcing a delay in filing its Form 10-K for 2016 because the Company was “reviewing 
certain aspects of revenue recognition at its Korean ... location[].”  Specifically, Alere disclosed 
“inappropriate conduct at the Company’s subsidiary in South Korea, Standard Diagnostics, Inc.” 
39. On April 17, Alere filed Form 8-K with the Commission, to announce that its 
Audit Committee had concluded that the Company’s previously filed financial statements for the 
years ended December 31, 2013, 2014 and 2015, and the first three quarters of 2016, should not 
be relied upon. 
40. On June 5, 2017, following an internal investigation into the South Korean 
conduct, Alere filed its Form 10-K with the Commission for 2016.  The investigation found that 
previously filed financial statements included errors involving the timing of revenue recognition 
caused by, “...among other things, misrepresentation and/or fabrication of documents used to 
validate revenue recognition....” 
41. Alere’s restated financial statements in the 2016 Form 10-K also establish that 
Alere’s press releases announcing its quarterly and annual financial results filed with the 
Commission as exhibits to its Form 8-Ks were also misstated. 
42. The table below illustrates the cumulative impact of the out-of-period accounting 
errors on net revenue and net income (loss) recorded by Alere in its August 2016 revision and 
the June 2017 restatement for the periods 2013, 2014 and the first three quarters of 2015 which 
were subject to the August 2016 revision.
5
  
                                                 
5
 The “as reported” amounts in the table below are the net revenues and net income (loss) amounts reported by Alere 
prior to the August 8, 2016 revision. 
 

 
9 
Impact on Previously Issued Financial Statements Filed Prior to the August 2016 Revision (in $000s) 
 
 
2013 2014 Q1 2015 Q2 2015 Q3 2015 
Net Revenue (As Reported) 
$ 2,616,364 $ 2,588,704 $ 608,153 $ 629,156 $ 602,044 
Restatement and Revision Adjustments 
(9,009) (11,703) 1,753 (5,182) 2,555 
Net Revenue (As Restated and Revised) 
2,607,355 2,577,001 609,906 623,974 604,599 
  
2013 2014 Q1 2015 Q2 2015 Q3 2015 
Net Income (Loss) (As Reported) 
$ (71,733) $ (37,710) $ 209,228 $ 20,263 $        5,501 
Restatement and Revision Adjustments 
(1,805) 4,587 885 (5,765) (6,969) 
Net Income (Loss) (As Restated and Revised) 
(73,538) (33,123) 210,113 14,498 (1,468) 
 
43. The table below illustrates the cumulative impact of the out-of-period accounting 
errors on net revenue and net income (loss) recorded by Alere in its June 2017 restatement for 
the periods Q4 2015 through Q3 2016.
6
 
Impact on Previously Issued Financial Statements Filed on and After August 2016 Revision (in $000s) 
 
 
Q4 2015 2015 Q1 2016 Q2 2016 Q3 2016 
Net Revenue (As Reported) 
$ 623,285 $ 2,463,316 $ 578,209 $ 611,088 $ 582,354 
Restatement Adjustments 
(6,149) (7,701) 8,731 (784) (72) 
Net Revenue (As Restated) 
617,136 2,455,615 586,940 610,304 582,282 
  
Q4 2015 2015 Q1 2016 Q2 2016 Q3 2016 
Net Income (Loss) (As Reported) 
$ (16,059) $ 206,757 $ (9,977) $ (34,891) $ 22,027 
Restatement Adjustments 
(3,018) (2,692) 4,005 2,084 (6,364) 
Net Income (Loss) (As Restated) 
(19,077) 204,065 (5,972) (32,807) 15,663 
 
44. Alere reported in its Form 10-K for 2016 that the four material weaknesses cited 
in the 2015 10-K remained in place as of December 31, 2016 and Alere added a fifth material 
weakness disclosure: 
We did not maintain an effective control environment at [SD].  Specifically, certain 
employees at SD engaged in inappropriate conduct, which was facilitated by an 
inadequate segregation of duties, including (a) colluding with subordinates and certain 
third parties to circumvent controls and fabricate documents related to revenue 
recognition and other matters, some of which were provided to finance management and 
our external auditors and (b) overriding controls related to the observation of physical 
inventories.  In addition, other employees, including certain members of SD finance 
management responsible for other controls at the subsidiary, were aware of the override 
of controls but did not report this conduct as required by our policies and procedures. 
Alere Also Misstated Its Financial Statements Due to Tax Accounting Errors 
45. By 2014, Alere stopped acquiring companies and instead began to divest itself of 
various subsidiaries and business segments.  In October 2014, Alere sold two subsidiaries, 
Accountable Care Solutions, LLC and Wellogic ME FZ – LLC.  In January 2015, Alere sold the 
                                                 
6
 The “as reported” amounts in the table below are the net revenues and net income (loss) amounts reported by Alere 
in the August 8, 2016 revision for Q4 2015 and the full-year 2015 and subsequent Form 10-Qs for the three quarters 
in 2016. 

 
10 
remaining portion of its health management business.  These sales affected Alere’s accounting 
for its income taxes including income tax expense or benefit and associated assets and liabilities. 
46. On February 10, 2015, before it finished its tax accounting for Fiscal Year 2014, 
Alere released its unaudited financial results for the quarter ended December 31, 2014.  It 
announced a net loss of $165 million. 
47. Alere’s external tax consultants advised the head of Alere’s tax department that 
Alere was incorrectly accounting for Alere’s divestiture of part of its health management 
business.  The head of the tax department disagreed and decided not to follow the advice of the 
external tax consultants. 
48. Alere intended to file its Form 10-K on March 3, 2015, but its external auditor 
questioned the tax accounting for the sale of the health management business.  The external 
auditor took the same position as Alere’s external tax consultant had.  As a result, instead of 
filing its Form 10-K with the Commission, Alere filed for a 15-day extension and began re-
calculating its tax provision and associated assets and liabilities.     
49. Two days later, on March 5, 2015, Alere filed its 10-K.  Correcting the tax error 
contained in the previously disclosed financial results caused an increase in Alere’s reported net 
income of over $175 million for the year ended December 31, 2014 which caused the previously 
reported net loss to swing to profit of approximately $10 million.  
50. While closing the financial statements for the first quarter of 2015 in April 2015, 
Alere discovered that its previous calculations for the tax impact of the divestiture were 
incorrect.  After further analysis, Alere concluded that it had also incorrectly accounted for the 
tax impact of the divestiture of the other subsidiaries it sold in October 2014.  As a result of these 
errors (and other out-of-period errors predominately related to tax matters), on May 28, 2015, 
Alere filed an amended Form 10-K for the year ended December 31, 2014 which restated the 
previously reported net income of approximately $10 million to a net loss of over $37 million. 
51. The conduct described above contributed to Alere’s violations of 13(a), 
13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, 13a-11, and 13a-13 
thereunder. 
Tax Accounting Errors Led to Required Restatements of Financial Statements  
and Assessments of Effectiveness of Internal Control over Financial Reporting 
 
52. On March 5, 2015, Alere filed with the Commission its Form 10-K for the 2014 
fiscal year.  That Form 10-K disclosed a material weakness in Alere’s Internal Control over 
Financial Reporting.  The accounting error was corrected in the 2014 financial statements, and 
the material weakness as of December 31, 2014 was disclosed as follows: 
We did not design effective controls to assess the accounting for deferred tax assets 
which become recognizable as a result of dispositions. 

 
11 
53. On May 28, 2015, Alere filed with the Commission its Form 10-K/A, amending 
and restating the Form 10-K it filed in March 2015.  Alere concurrently filed Form 10-Q/A for 
the third quarter of 2014.  The financial statements for the remaining 2014 quarters and prior 
years presented in the filings were revised, but not restated.  The accounting errors leading to the 
May 2015 restatement principally related to the areas covered by the previously disclosed 
material weakness, but also incorporated other out-of-period errors involving tax and non-tax 
areas.  The following table illustrates the impact to Alere’s previously reported annual net 
income (in $000s): 
 
 
 
54. In connection with the May 28, 2015 Form 10-K/A, Alere revised its previously 
disclosed material weakness as of December 31, 2014: 
We did not design effective controls to assess the accounting for deferred taxes related to 
dispositions. 
55. On November 9, 2015, Alere filed with the Commission its Form 10-Q for the 
third quarter ended September 30, 2015.  In this filing, Alere disclosed that it had discovered and 
corrected certain out-of-period errors related to 2014 in Q3 2015 associated with accounting for 
U.S. taxes on foreign earnings.  In the Form 10-Q for Q3 2015, Alere expanded its disclosure of 
the material weakness which existed at December 31, 2014 to: 
We did not maintain a sufficient complement of resources with adequate experience and 
expertise in accounting for income taxes, as a result of which our accounting controls did 
not operate at a level of precision to identify errors in the calculation of tax balances 
resulting from dispositions and U.S. taxes on foreign earnings. 
56. On November 13, 2015, Alere filed another Form 10-K/A for 2014 to restate its 
previously filed financial statements.  The Form 10-K/A incorporated the expanded material 
weakness disclosure described in the Form 10-Q filed five days before. 
Alere Recorded Improper Payments  
from BioSystems to a Government Official in Colombia 
57. During 2007 and 2008, Alere purchased a private Colombian distributer of Alere 
products called BioSystems, S.A., ultimately renaming it Alere Colombia in 2016.  In 
conjunction with the acquisition, Alere installed Biosystems’ former primary shareholder and 
owner as Biosystems’ General Manager (the “Colombia GM”).   
Pe riod
 Pre viously Re porte d 
Ne t Income  (Loss) 
 Adjustme nt 
 Ne t Income  (Loss) As 
Re state d / Re vise d 
FY 20149,948$                          (47,658)$                       (37,710)$                       
FY 2013(70,278)                         (1,455)                          (71,733)                         
FY 2012(77,907)                         (310)                             (78,217)                         

 
12 
58. Biosystems’ customers included a set of entities known as an Entidad Promotora 
de Salud, or EPS, which provided health insurance services for their members.  These entities 
were created by Colombian law as part of the Colombian government’s efforts to provide 
universal health benefits to its citizens.  Under this system, EPSs were responsible for organizing 
and guaranteeing the provision of health services for their enrolled participants and managing 
their participants’ health risks.  Among other things, EPSs contracted for health services on 
behalf of their participants through a network of public, private, and their own health service 
providers.  EPSs were both private and government controlled. 
59. From at least 2006, Biosystems sold products to an EPS that operated as a private 
entity (the “Customer EPS”).  Biosystems’ contact at the Customer EPS was a management level 
employee (“the “Customer EPS Manager”) responsible for, among other things, recommending 
and approving products – including Biosystems’ products – for the Customer EPS to purchase 
and provide to its enrolled participants.  The Colombia GM oversaw the Customer EPS account 
and dealt directly with the Customer EPS Manager. 
60. During 2011 through 2013, due to allegations of mismanagement at the Customer 
EPS, the Government of Colombia, acting through the Ministry of Health, took control and 
direction of the Customer EPS.  During this time, the Customer EPS was an instrumentality of 
the Government of Colombia and its employees were officials of the Government of Colombia.  
In 2013, the Ministry of Health began dissolving the Customer EPS and transferring its members 
to another EPS. 
61. From 2007 through at least 2012, Biosystems, at the direction of the Colombia 
GM, made improper payments totaling approximately $275,000 to the Customer EPS Manager 
in order to obtain and retain business from the Customer EPS.  The payments began at least six 
months before Alere acquired Biosystems.  Biosystems disguised these improper payments as 
payments for purported consulting services from the Customer EPS Manager’s husband, sister-
in-law, and friend.  In fact, none of the recipients of these improper payments performed 
legitimate consulting services for Biosystems sufficient to justify the amount of payments 
received. 
62. From 2011 through 2013, Biosystems sold approximately $7.6 million of products 
to the Customer EPS.  During this time, the Customer EPS Manager continued in her position at 
the Customer EPS and remained responsible for recommending Biosystems’ products to the 
Customer EPS.  From 2011 through 2013, Biosystems earned approximately $3.18 million in 
profits from the approximate $7.6 million in sales to the Customer EPS.  In 2013, the Colombia 
GM hired the Customer EPS Manager to work at Biosystems. 
63. In 2015, Alere’s corporate management began an internal investigation into 
consulting payments at Biosystems and discovered the improper payments.  Shortly thereafter, 
the Customer EPS Manager resigned from Biosystems.  The Colombia GM had previously 
resigned from Biosystems in January 2015. 
64. The improper payments to the Customer EPS Manager were recorded as 
legitimate consulting expenses in Biosystems’ books and records.  Biosystems’ books and 

 
13 
records were consolidated into Alere’s books and records thereby causing Alere’s books and 
records to be inaccurate.  Alere also failed to devise and maintain an adequate system of 
accounting controls sufficient to prevent and detect the improper payments that occurred over 
several years. 
65. Through the conduct described above, Alere violated Sections 13(b)(2)(A) and 
13(b)(2)(B) of the Exchange Act through the inaccurate recording of the payments to the 
Customer EPS’s relations on its books and records, and its failure to devise or maintain internal 
accounting controls sufficient to provide reasonable assurances that its funds would not be used 
to make improper payments in contravention of Alere’s policies. 
Alere India Failed to Maintain Internal Controls  
Against Improper Payments to Government Officials  
 
66. In 2011, an India-based subsidiary of Alere, Alere Medical Pvt. Ltd. (“Alere 
India”), acting through an India-based distributor (“India Distributor”), won a contract to provide 
malaria testing kits to a local governmental entity for a national disease control program. 
67. In early 2012, the India Distributor wrote a letter to Alere India’s then-Vice 
President of Marketing and Sales about the tender.  The India Distributor noted that it had met 
with officials of the local governmental entity who had informed them that if the local 
governmental officials were paid a four percent commission, they would increase the orders 
under the tender from 200,000 to 1,000,000 testing kits.  Alere India’s Vice President of 
Marketing and Sales approved the four percent commission and the India Distributor proceeded 
to incorporate the increased commission amount into the prices for the test kits.  Alere India 
failed to record the additional commission in its books and records. 
68. In August 2012, the India Distributor requested from Alere India a credit memo 
for the commission it had paid the local government officials in connection with the initial 
200,000 test kits it had provided to the local governmental entity.  Around the same time, the 
India Distributor paid Alere India the amounts owed for the 200,000 test kits, but deducted the 
commission paid to the local government officials from the total payment amount.  The India 
Distributor noted the reasons for the deduction on an invoice accompanying the payment. 
69. In December 2012, the new management at Alere India discovered the unpaid 
credit memo associated with the 200,000 test kits.  Alere’s corporate management initiated an 
internal investigation, and it directed Alere India to refuse to issue the requested credit memo.  
Alere India requested and received reimbursement from the India Distributor for increased 
commission the India Distributor had withheld on that order.  Alere, however, retained the 
approximate $150,000 in profits that it obtained from the increased contract. 
70. Through the conduct described above, Alere violated Sections 13(b)(2)(A) and 
13(b)(2)(B) of the Exchange Act through the inaccurate recording of the commissions paid by 
Alere India on its books and records, and its failure to devise or maintain internal accounting 
controls sufficient to provide reasonable assurances that its funds would not be used to make 
improper payments in contravention of Alere’s policies. 

 
14 
Alere Offered Securities 
71. During the relevant period, Alere issued shares through a number of employee 
share purchase programs offered to employees.  Also during the relevant period, Alere issued 
debt securities, including, on June 24, 2015, Alere completed an offering of $425 million of 
6.375% senior subordinated notes due in 2023.  Alere also issued senior notes on December 11, 
2012 and May 24, 2013. 
Violations 
72. Section 10(b) of the Exchange Act and Rule 10b-5 thereunder prohibit fraudulent 
conduct in connection with the purchase and sale of a security.  As a result of the conduct 
described above related to early sales at SD, Alere violated Section 10(b) of the Exchange Act 
and Rule 10b-5 thereunder. 
73. Section  17(a) of the Securities Act prohibits fraudulent conduct in the offer and 
sale of securities.  As a result of the conduct described above, Alere violated Section 17(a) of the 
Securities Act. 
74. Section13(a) of the Exchange Act requires issuers of securities registered pursuant 
to Section 12 of the Exchange Act to file periodic and other reports with the Commission.  With 
exceptions not applicable here, Rules 13a-1, 13a-11, and 13a-13 of the Exchange Act require 
each issuer to file annual, current,  and quarterly reports respectively on the appropriate forms 
and within the period specific on the form.  Rule 12b-20 further requires that the required reports 
contain such further material information, if any, as may be necessary to make the required 
statements, in light of the circumstances under which they are made not misleading.  As a result 
of the conduct described above, Alere violated Section 13(a) of the Exchange Act and Rules 12b-
20, 13a-1, 13a-11, and 13a-13 thereunder. 
75. Section 13(b)(2)(A) of the Exchange Act requires issuers of securities registered 
pursuant to Section 12 of the Exchange Act to make and keep books, records and accounts, 
which, in reasonable detail, accurately and fairly reflect their transactions and dispositions of 
their assets.  As a result of the conduct described above, Alere violated Section 13(b)(2)(A) of 
the Exchange Act. 
76. Section  13(b)(2)(B) of the Exchange Act requires issuers of securities registered 
pursuant to Section 12 of the Exchange Act to, among other things, devise and maintain a system 
of internal accounting controls sufficient to provide reasonable assurances that transactions are 
recorded as necessary to permit preparation of financial statements in accordance with generally 
accepted accounting principles and that transactions are executed in accordance with 
management’s general or specific authorization.  As a result of the conduct described above, 
Alere violated Section 13(b)(2)(B) of the Exchange Act. 
IV. 
 
 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 
agreed to in Respondent Alere’s Offer. 

 
15 
 
 Accordingly, pursuant to Section 8A of the Securities Act and Section 21C of the 
Exchange Act, it is hereby ORDERED that: 
 
A. Respondent Alere shall cease and desist from committing or causing any 
violations and any future violations of Sections 10(b), 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the 
Exchange Act and Rules 10b-5, 12b-20, 13a-1, 13a-11, and 13a-13thereunder, and Section 17(a) 
of the Securities Act.     
 
B. Respondent shall, within 14 days of the entry of this Order, pay a civil money 
penalty of $9,200,000, disgorgement of $3,328,689, and prejudgment interest of $495,196 to the 
Securities and Exchange Commission for transfer to the general fund of the United States 
Treasury, subject to  Exchange Act Section 21F(g)(3).  If timely payment is not made, additional 
interest shall accrue pursuant to SEC Rule of Practice 600 and 31 U.S.C. §3717.   
Payment must be made in one of the following ways:   
(1) Respondent may transmit payment electronically to the Commission, 
which will provide detailed ACH transfer/Fedwire instructions upon 
request;  
(2) Respondent may make direct payment from a bank account via Pay.gov 
through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  
(3) Respondent may pay by certified check, bank cashier’s check, or United 
States postal money order, made payable to the Securities and Exchange 
Commission and hand-delivered or mailed to:  
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
 
Payments by check or money order must be accompanied by a cover letter identifying 
Alere, Inc. as a Respondent in these proceedings, and the file number of these proceedings; a 
copy of the cover letter and check or money order must be sent to Associate Director John 
T.Dugan, Division of Enforcement, Securities and Exchange Commission, Boston Regional 
Office, 33 Arch Street, 24
th
 Floor, Boston, MA 02110.   
 
C. Amounts ordered to be paid as civil money penalties pursuant to this Order shall 
be treated as penalties paid to the government for all purposes, including all tax purposes.  To 
preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 
Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any 
award of compensatory damages by the amount of any part of Respondent’s payment of a civil 
penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants such 

 
16 
a Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order 
granting the Penalty Offset, notify the Commission's counsel in this action and pay the amount of 
the Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be 
deemed an additional civil penalty and shall not be deemed to change the amount of the civil 
penalty imposed in this proceeding.  For purposes of this paragraph, a “Related Investor Action” 
means a private damages action brought against Respondent by or on behalf of one or more 
investors based on substantially the same facts as alleged in the Order instituted by the 
Commission in this proceeding. 
 By the Commission. 
 
 
 
       Brent J. Fields 
       Secretary 
 
 
 
 

UNITED STATES OF AMERICA 

 Before the 

 SECURITIES AND EXCHANGE COMMISSION 

 

SECURITIES ACT OF 1933 

Release No. 10417 / September 28, 2017 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 81742 / September 28, 2017 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-18228 

 

 

In the Matter of 

 

ALERE INC., 

 

Respondent. 

 

 

ORDER INSTITUTING CEASE-AND-DESIST 

PROCEEDINGS, PURSUANT TO SECTION 

8A OF THE SECURITIES ACT OF 1933 AND 

SECTION 21C OF THE SECURITIES 

EXCHANGE ACT OF 1934, MAKING 

FINDINGS, AND IMPOSING A CEASE-AND-

DESIST ORDER  

   

 

I. 

 

 The Securities and Exchange Commission (“Commission”) deems it appropriate and in 

the public interest that public administrative and cease-and-desist proceedings be, and hereby 

are, instituted pursuant to Section 8A of the Securities Act of 1933 (“Securities Act”) and 

Section 21C of the Securities Exchange Act of 1934 (“Exchange Act”) against Alere Inc. 

(“Respondent”).   

 

II. 

 

 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 

purpose of these proceedings and any other proceedings brought by or on behalf of the 

Commission, or to which the Commission is a party, and without admitting or denying the 

findings herein, except as to the Commission’s jurisdiction over it and the subject matter of these 

proceedings, which are admitted, Respondent consents to the entry of this Order Instituting 

Cease-and-Desist Proceedings, Pursuant to Section 8A of the Securities Act of 1933 and Section 

21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist 

Order (“Order”), as set forth below.   

 



 2 

III. 

 

 On the basis of this Order and Respondent’s Offer, the Commission finds
1
 that: 

 

Summary 

1. Alere is a Massachusetts-based public company, traded on the New York Stock 

Exchange, which manufactures and sells diagnostic tests for infectious disease, cardiometabolic 

disease and toxicology.  Alere maintains operations and sells its products around the world.  

Between 2011 and 2016, Alere engaged in the improper premature recognition of revenue in its 

financial statements filed with the Commission.  And, between 2011 and 2013, Alere’s 

subsidiary in Colombia improperly characterized payments to a Colombian government official 

in Alere’s books and records.  Alere’s subsidiary in India also failed to properly record certain 

payments made by a distributor in its books and records.  Alere further failed to devise and 

maintain a sufficient system of internal accounting controls.  As a result, Alere violated Sections 

10(b), 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 10b-5, 12b-20, 13a-1, 

13a-11, and 13a-13 thereunder, and Section 17(a) of the Securities Act.    

2. Since May 2015, Alere has at three different times revised or restated its financial 

statements that had appeared in the company’s periodic filings with the Commission.  In May 

2015, Alere restated its 2014 Form 10-K due to incorrect tax accounting.  In August 2016, Alere 

filed its 2015 Form 10-K, which revised the revenue and associated entries in its financial 

statements for prior periods due to incorrect reporting of revenue.  In June 2017, Alere filed its 

2016 Form 10-K, which restated its revenue and associated entries for prior periods due to newly 

discovered improper reporting of revenue.  In total, Alere has restated its financial statements for 

fiscal years 2013, 2014, and 2015 and for the following fiscal quarters:  Q3 2014, Q1-Q3 2015, 

and Q1-Q3 2016. 

3. Revenue Recognition Problems:  From 2011 to 2016, Alere misstated its 

revenue in its financial statements filed with the Commission.  These revenue misstatements 

resulted from (a) intentional early reporting of revenue by Alere’s South Korean subsidiary, 

Standard Diagnostics, and (b) improper revenue recognition practices by Alere at subsidiaries 

located, among other locations, in South Korea, Israel, South Africa, Ireland, and China.  The 

improper revenue recognition practices primarily related to the timing of when Alere could have 

recognized the revenue.  As a result, Alere’s revision and restatement of its revenue over the 

five-year period, shifted to a later reporting period in total over $260 million in revenue from the 

quarter in which it was originally recognized.  The revenue involved in “early sales” and other 

practices described below was eventually recognizable and collected, just not in the quarter in 

which it was recorded. 

4. Recording of Offers and Payments to Foreign Officials:  Between 2011 and 

2013, Alere’s foreign subsidiaries located in Colombia and India indirectly made improper offers 

                                                 
1  The findings herein are made pursuant to Respondent’s Offer of Settlement and are not binding on any other 

person or entity in this or any other proceeding.  

 



 3 

and payments to foreign government officials for the purpose of making sales of its products.  

Profits from the sales associated with the improper offers and payments totaled approximately 

$3.3 million.   

Respondent 

5. Alere Inc. is a Delaware corporation with its principal place of business in 

Waltham, MA.  It is a manufacturer of medical diagnostic testing equipment.  Alere’s common 

stock is registered pursuant to Section 12(b) of the Exchange Act and trades on the New York 

Stock Exchange under the symbol “ALR.” 

Other Relevant Entities 

6. Alere Colombia S.A. is a wholly-owned subsidiary of Alere formerly known as 

BioSystems, S.A. (“BioSystems”).  Alere Colombia sells Alere’s global products into the 

Colombian market.  Alere Colombia is located in Bogota, Colombia.  Biosystems was an 

independent distributor of Alere products until acquired by Alere. 

7. Standard Diagnostics, Inc. (“SD”) is a wholly-owned subsidiary of Alere.  Its 

main products test for diseases such as Malaria, Dengue, HIV, and Syphilis.  Standard 

Diagnostic’s principal office is located in Giheung-gu, South Korea.  Prior to 2010, Standard 

Diagnostics was an independent and publicly-traded company listed in South Korea.  Alere 

acquired, through a tender offer, a majority share of its stock in 2010. 

8. Alere Medical Private Ltd. (“Alere India”) is a wholly-owned subsidiary of 

Alere.  Alere India sells Alere’s global products into the Indian market.  Alere India’s principal 

office is located in Gurgaon, India.   

9. The VP of SD Sales, a resident and citizen of Korea, served as the head of SD’s 

sales and marketing departments from 2011 until 2016.  In 2013, he was also given the title of 

Vice President of Commercial Operations Africa.  During the entire time he was a management-

level employee working from an office in South Korea.  Alere intended to terminate the VP of 

SD Sales in 2015 based on conduct not related to the matters discussed herein, but postponed the 

termination to cooperate with ongoing government investigations.  The VP of SD Sales resigned 

in 2016. 

10. The SD Finance Director, a resident and citizen of Korea, served as the head of 

SD’s finance department from 2011 until 2017.  He was removed from his position following an 

internal investigation in 2017 and subsequently resigned. 

Facts 

11. During the 2000s and early 2010s, Alere grew quickly, in part because it acquired 

a number of foreign companies.  Alere’s corporate finance group required all these newly 

acquired companies to adopt Alere’s Revenue Recognition Policy. 

12. Alere’s Revenue Recognition Policy established standards and procedures to 

ensure that Alere recognized revenue in compliance with management’s objectives and U.S. 



 4 

generally accepted accounting principles (“GAAP”).  Among other things, the policy stated that 

revenue should not be recognized until four basic criteria have been met:  “(1) persuasive 

evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) 

the fee is fixed and determinable; and (4) collection is reasonably assured.” More specifically, 

the policy stated that Alere recognizes revenue upon title transfer of the products to third-party 

customers. 

13. Alere’s corporate finance group delegated revenue recognition decision-making 

authority to Alere’s subsidiaries.  These subsidiaries entered their revenue information into local 

books and records, which were consolidated into Alere’s own books and records and used to 

create the financial statements that it filed with the Commission. 

Intentional False Reporting of Revenue at Alere’s South Korean-Subsidiary, SD 

14. In February 2010, Alere acquired a majority interest in SD.  Beginning with fiscal 

year 2010, SD’s financials were consolidated into Alere’s financial statements, which were filed 

in Alere’s Form 10-K. 

15. Beginning no later than 2011, the VP of SD Sales initiated a scheme to inflate 

SD’s revenue numbers at or near the end of reporting periods.  The VP of SD Sales and other SD 

employees wanted to accelerate revenue in order to meet African region sales quarterly and 

annual revenue targets.  The scheme involved recognizing revenue before delivery of the product 

had occurred in violation of Alere’s Revenue Recognition Policy and in contravention of GAAP.  

The practice came to be known amongst SD employees as “early sales.”       

16. “Early sales” were generally conducted in one of two ways: 

a. In the first scenario, the product remained undelivered in SD’s warehouse 

at the end of a quarter.  SD employees then intentionally created false 

delivery documents or falsified shipping documents to support a delivery 

date before the end of a quarter.  This falsified documentation was used to 

recognize the sale of product days or weeks earlier than its actual delivery.     

b. In the second scenario, immediately before the end of a quarter, SD would 

direct a shipping agent to pick up product and store it in the shipping 

agent’s warehouse until the customer requested delivery.  SD employees 

used the pick-up receipts from the shipping agent as proof of delivery to a 

customer.  This documentation was improperly used to recognize the sale 

of product days or weeks earlier than its actual delivery. 

17. The size of the transactions for which revenue was improperly recognized ranged 

from as small as $25,000 to greater than $2 million. 

18. To execute the scheme, the VP of SD Sales involved personnel from SD’s sales, 

marketing, customer service, and warehouse departments. 



 5 

19. Over time, the number of sales transactions improperly recognized early each 

quarter grew, peaking in 2015.  In the fourth quarter of 2015, SD’s fraudulent “early sales” 

comprised approximately 29% of all the revenue SD reported that quarter.  This inflated revenue 

was incorporated in financial statements filed with Alere’s 2015 Form 10-K. 

20. Initially, the scheme did not directly involve employees within SD’s finance 

department.  But by the end of 2015, at least two individuals in SD’s finance department, the SD 

Finance Director and an SD Finance Manager, were aware of and complicit in “early sales.” 

21. During 2016, in response to issues with revenue recognition in China and Africa, 

Alere’s management conducted an internal assessment of revenue recognition practices 

throughout its subsidiaries.  During the assessment, the SD Finance Director and the SD Finance 

Manager intentionally concealed the “early sales” scheme from those conducting the assessment 

and Alere’s independent auditors. 

22. In fact, SD continued to prematurely recognize revenue during Alere’s ongoing 

assessment by improperly recognizing revenue from unconsummated sales on the last day of Q2 

and Q3 2016.  SD’s improper revenue recognition continued through Q4 2016. 

23. As a result of the conduct described above, Alere violated Section 10(b) of the 

Securities Exchange Act, Rule 10b-5 thereunder, which prohibit fraudulent conduct in 

connection with the purchase or sale of securities, and Section 17(a) of the Securities Act which 

prohibits fraudulent conduct in the offer and sale of securities.  This conduct also contributed to 

Alere’s violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 

12b-20, 13a-1, 13a-11, and 13a-13 thereunder, which require every issuer of a security registered 

pursuant to Section 12 of the Exchange Act to file with the Commission information, documents, 

and annual and quarterly reports as the Commission may require, and mandate that periodic 

reports contain such further material information as may be necessary to make the required 

statements not misleading. 

Failure to Conform Revenue Reporting to GAAP by Alere from 2013-2016 

Chinese “Bill and Hold” Transactions 

24. From Q4 2012 through Q1 2016, employees at an Alere subsidiary located in 

China recognized revenue from the sale of product that remained undelivered at the subsidiary’s 

warehouses.  The practice was called “postponement of delivery.” While customers agreed not to 

take delivery and submitted a “Declaration of Postponement” form to the subsidiary, the 

arrangement did not permit the recognition of revenue under applicable Bill & Hold guidance 

under GAAP.  From 2013 to 2016, the subsidiary entered into more than 3,800 “postponement of 

delivery” transactions associated with more than $28 million in revenue that was recognized in 

an earlier quarter than permissible under GAAP. 



 6 

African Contingent Arrangements, Bill-and-Hold Transactions, and Revenue Cut-off 

Issues 

25. From at least 2013 through 2015, employees of Alere’s Africa commercial team 

entered into sales arrangements for which revenue was improperly recognized.  Sales included 

contingent arrangements,
2
 bill and hold transactions,

3
 and sales where product was stored at a 

third-party’s warehouse.  In addition, revenue from certain sales of Alere product to be used in 

Africa was improperly recognized due to cut-off issues and improper execution of or changes to 

shipping terms.   

26. Alere’s Africa commercial team included employees from Alere’s Israeli, South 

African, and Irish subsidiaries and employees from SD.  In general, commercial and finance 

personnel lacked a sufficient understanding of how such arrangements and shipping terms 

affected when Alere could recognize revenue under U.S. GAAP. 

27. These sales arrangements and issues led to Alere recognizing revenue of 

approximately $24 million in an earlier quarter than permissible under GAAP.   

African Distributor Sales Agreements 

28. From at least 2011 through 2015, employees of Alere’s Africa commercial team 

made sales to distributors operating in Africa pursuant to distributor sales agreements.  Many of 

the agreements with African distributors executed by Alere’s Israeli and South African 

subsidiaries contained a provision, a “Retention of Title” clause, that stated Alere retained title to 

the product until it was paid in full by the distributor.
4
  As written, the provision precluded Alere 

from recognizing revenue under GAAP until Alere received payment for the product from the 

distributor.  Finance personnel, however, either failed to review the Retention of Title clause in 

the agreements or were unaware of its implication for revenue recognition.   

29. Typically, Alere’s African distributor customers had at least 30 days to pay for 

products.  Lacking the resources and understanding of GAAP, Alere’s subsidiaries, recognized 

revenue upon delivery, often immediately before or at the end of a quarter, even though without 

payment this was not proper given the presence of the Retention of Title clause.   

30. As a result, Alere recognized more than $86 million in revenue from sales to 

African distributors in an earlier quarter than permissible under GAAP. 

                                                 
2 Contingent arrangements do not become fixed or determinable until the contingency resolves, and thus, revenue 

may not be recognized until that time. 

 
4 The distribution agreements generally included language stating that the distributor was holding the product for 

Alere and the product needed to be stored separately and labeled as Alere’s product and that Alere maintained the 

right to enter the distributors’ premises and remove its product. As such, these distributor arrangements were broad 

and therefore extended beyond the retention of title exemption contemplated in Staff Accounting Bulletin No. 104. 



 7 

Other Revenue Recognition Issues 

31. In addition, from at least 2013 through 2015, Alere experienced wide-spread 

month or quarter end revenue cut-off issues at subsidiaries located around the world, including in 

Argentina, Australia, Brazil, China, Colombia, Japan, the United States, and Europe.  The 

various subsidiaries independently used similar improper quarter end cut-off procedures for 

revenue. 

32. As a result of the improper revenue recognition cut-off practices, Alere 

recognized approximately $97 million in revenue from non-African customers in an earlier 

quarter than permissible under GAAP. 

33. The conduct at Alere’s subsidiaries described above contributed to Alere’s 

violations of 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, 

13a-11, and 13a-13  thereunder, and Sections 17(a)(2) and (3) of the Securities Act. 

Improper Revenue Recognition Led to Required Restatements of Commission Filings 

and Revisions of Financial Statements and Assessments of the Effectiveness of Internal 

Control over Financial Reporting  

34. To correct the inaccurate revenue reporting summarized above, Alere revised and 

restated its financial statements. 

35. On February 26, 2016, Alere filed a Form 12b-25 with the Commission 

announcing a delay in the filing of its Form 10-K for the year ended December 31, 2015 due to 

management’s “analysis of certain aspects of revenue recognition in Africa and China and any 

potential implications on our evaluation of internal control over financial reporting for the year 

ended December 31, 2015.” 

36. Management completed its assessment of revenue recognition and filed with the 

Commission Form 10-K for 2015 on August 8, 2016. Alere reported: 

Based on our review, we determined that, in 2013 and 2014 and the first three quarters of 

2015, we had incorrectly recorded certain revenue transactions for such periods.  

Specifically, the errors in the application of U.S. GAAP rules regarding the timing of 

revenue recognition primarily relate to:  (i) transactions, principally in Africa, in which 

we recognized revenue when the product shipped to the distributor, but we contractually 

retained title in the products until the distributor paid for the products in full or the 

distributor was not obligated to pay us until the products were sold through to the end-

user; (ii) “bill and hold” transactions, principally in China, which did not meet the criteria 

for revenue recognition under U.S. GAAP; and (iii) other transactions, in which we 

recognized revenue prior to full satisfaction of all contractual criteria for title and risk of 

loss passing to the customer. 

37. Alere concluded that it had several material weaknesses in internal control over 

financial reporting related to revenue recognition: 



 8 

a. We did not maintain a sufficient complement of resources at our 

subsidiaries with appropriate knowledge, experience and training to ensure proper 

application of US GAAP in determining revenue recognition. 

b. We also did not maintain effective controls over information and 

communications as it relates to revenue recognition at our subsidiaries.  Specifically, we 

did not implement and reinforce an adequate process for internally communicating 

nonstandard terms and conditions between our subsidiaries’ commercial operations and 

finance groups and between our subsidiaries’ finance groups and our corporate 

accounting group. 

c. We did not design effective controls over the review of terms of purchase 

orders and customer contracts, including amendments to contracts, to ensure proper 

application of US GAAP in determining revenue recognition. 

d. We did not design effective controls to ensure that revenue would not be 

recognized until title and risk of loss had passed to our customers. 

38. On March 1, 2017, Alere filed another Form 12b-25 with the Commission, 

announcing a delay in filing its Form 10-K for 2016 because the Company was “reviewing 

certain aspects of revenue recognition at its Korean … location[].”  Specifically, Alere disclosed 

“inappropriate conduct at the Company’s subsidiary in South Korea, Standard Diagnostics, Inc.” 

39. On April 17, Alere filed Form 8-K with the Commission, to announce that its 

Audit Committee had concluded that the Company’s previously filed financial statements for the 

years ended December 31, 2013, 2014 and 2015, and the first three quarters of 2016, should not 

be relied upon. 

40. On June 5, 2017, following an internal investigation into the South Korean 

conduct, Alere filed its Form 10-K with the Commission for 2016.  The investigation found that 

previously filed financial statements included errors involving the timing of revenue recognition 

caused by, “...among other things, misrepresentation and/or fabrication of documents used to 

validate revenue recognition....” 

41. Alere’s restated financial statements in the 2016 Form 10-K also establish that 

Alere’s press releases announcing its quarterly and annual financial results filed with the 

Commission as exhibits to its Form 8-Ks were also misstated. 

42. The table below illustrates the cumulative impact of the out-of-period accounting 

errors on net revenue and net income (loss) recorded by Alere in its August 2016 revision and 

the June 2017 restatement for the periods 2013, 2014 and the first three quarters of 2015 which 

were subject to the August 2016 revision.
5
  

                                                 
5 The “as reported” amounts in the table below are the net revenues and net income (loss) amounts reported by Alere 

prior to the August 8, 2016 revision. 

 



 9 

Impact on Previously Issued Financial Statements Filed Prior to the August 2016 Revision (in $000s)  

 2013 2014 Q1 2015 Q2 2015 Q3 2015 

Net Revenue (As Reported) $ 2,616,364 $ 2,588,704 $ 608,153 $ 629,156 $ 602,044 

Restatement and Revision Adjustments (9,009) (11,703) 1,753 (5,182) 2,555 

Net Revenue (As Restated and Revised) 2,607,355 2,577,001 609,906 623,974 604,599 

  

2013 2014 Q1 2015 Q2 2015 Q3 2015 

Net Income (Loss) (As Reported) $ (71,733) $ (37,710) $ 209,228 $ 20,263 $        5,501 

Restatement and Revision Adjustments (1,805) 4,587 885 (5,765) (6,969) 

Net Income (Loss) (As Restated and Revised) (73,538) (33,123) 210,113 14,498 (1,468) 

 

43. The table below illustrates the cumulative impact of the out-of-period accounting 

errors on net revenue and net income (loss) recorded by Alere in its June 2017 restatement for 

the periods Q4 2015 through Q3 2016.
6
 

Impact on Previously Issued Financial Statements Filed on and After August 2016 Revision (in $000s)  

 Q4 2015 2015 Q1 2016 Q2 2016 Q3 2016 

Net Revenue (As Reported) $ 623,285 $ 2,463,316 $ 578,209 $ 611,088 $ 582,354 

Restatement Adjustments (6,149) (7,701) 8,731 (784) (72) 

Net Revenue (As Restated) 617,136 2,455,615 586,940 610,304 582,282 

  

Q4 2015 2015 Q1 2016 Q2 2016 Q3 2016 

Net Income (Loss) (As Reported) $ (16,059) $ 206,757 $ (9,977) $ (34,891) $ 22,027 

Restatement Adjustments (3,018) (2,692) 4,005 2,084 (6,364) 

Net Income (Loss) (As Restated) (19,077) 204,065 (5,972) (32,807) 15,663 

 

44. Alere reported in its Form 10-K for 2016 that the four material weaknesses cited 

in the 2015 10-K remained in place as of December 31, 2016 and Alere added a fifth material 

weakness disclosure: 

We did not maintain an effective control environment at [SD].  Specifically, certain 

employees at SD engaged in inappropriate conduct, which was facilitated by an 

inadequate segregation of duties, including (a) colluding with subordinates and certain 

third parties to circumvent controls and fabricate documents related to revenue 

recognition and other matters, some of which were provided to finance management and 

our external auditors and (b) overriding controls related to the observation of physical 

inventories.  In addition, other employees, including certain members of SD finance 

management responsible for other controls at the subsidiary, were aware of the override 

of controls but did not report this conduct as required by our policies and procedures. 

Alere Also Misstated Its Financial Statements Due to Tax Accounting Errors 

45. By 2014, Alere stopped acquiring companies and instead began to divest itself of 

various subsidiaries and business segments.  In October 2014, Alere sold two subsidiaries, 

Accountable Care Solutions, LLC and Wellogic ME FZ – LLC.  In January 2015, Alere sold the 

                                                 
6 The “as reported” amounts in the table below are the net revenues and net income (loss) amounts reported by Alere 

in the August 8, 2016 revision for Q4 2015 and the full-year 2015 and subsequent Form 10-Qs for the three quarters 

in 2016. 



 10 

remaining portion of its health management business.  These sales affected Alere’s accounting 

for its income taxes including income tax expense or benefit and associated assets and liabilities. 

46. On February 10, 2015, before it finished its tax accounting for Fiscal Year 2014, 

Alere released its unaudited financial results for the quarter ended December 31, 2014.  It 

announced a net loss of $165 million. 

47. Alere’s external tax consultants advised the head of Alere’s tax department that 

Alere was incorrectly accounting for Alere’s divestiture of part of its health management 

business.  The head of the tax department disagreed and decided not to follow the advice of the 

external tax consultants. 

48. Alere intended to file its Form 10-K on March 3, 2015, but its external auditor 

questioned the tax accounting for the sale of the health management business.  The external 

auditor took the same position as Alere’s external tax consultant had.  As a result, instead of 

filing its Form 10-K with the Commission, Alere filed for a 15-day extension and began re-

calculating its tax provision and associated assets and liabilities.     

49. Two days later, on March 5, 2015, Alere filed its 10-K.  Correcting the tax error 

contained in the previously disclosed financial results caused an increase in Alere’s reported net 

income of over $175 million for the year ended December 31, 2014 which caused the previously 

reported net loss to swing to profit of approximately $10 million.  

50. While closing the financial statements for the first quarter of 2015 in April 2015, 

Alere discovered that its previous calculations for the tax impact of the divestiture were 

incorrect.  After further analysis, Alere concluded that it had also incorrectly accounted for the 

tax impact of the divestiture of the other subsidiaries it sold in October 2014.  As a result of these 

errors (and other out-of-period errors predominately related to tax matters), on May 28, 2015, 

Alere filed an amended Form 10-K for the year ended December 31, 2014 which restated the 

previously reported net income of approximately $10 million to a net loss of over $37 million. 

51. The conduct described above contributed to Alere’s violations of 13(a), 

13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, 13a-11, and 13a-13 

thereunder. 

Tax Accounting Errors Led to Required Restatements of Financial Statements  

and Assessments of Effectiveness of Internal Control over Financial Reporting 

 

52. On March 5, 2015, Alere filed with the Commission its Form 10-K for the 2014 

fiscal year.  That Form 10-K disclosed a material weakness in Alere’s Internal Control over 

Financial Reporting.  The accounting error was corrected in the 2014 financial statements, and 

the material weakness as of December 31, 2014 was disclosed as follows: 

We did not design effective controls to assess the accounting for deferred tax assets 

which become recognizable as a result of dispositions. 



 11 

53. On May 28, 2015, Alere filed with the Commission its Form 10-K/A, amending 

and restating the Form 10-K it filed in March 2015.  Alere concurrently filed Form 10-Q/A for 

the third quarter of 2014.  The financial statements for the remaining 2014 quarters and prior 

years presented in the filings were revised, but not restated.  The accounting errors leading to the 

May 2015 restatement principally related to the areas covered by the previously disclosed 

material weakness, but also incorporated other out-of-period errors involving tax and non-tax 

areas.  The following table illustrates the impact to Alere’s previously reported annual net 

income (in $000s): 

 

 
 

54. In connection with the May 28, 2015 Form 10-K/A, Alere revised its previously 

disclosed material weakness as of December 31, 2014: 

We did not design effective controls to assess the accounting for deferred taxes related to 

dispositions. 

55. On November 9, 2015, Alere filed with the Commission its Form 10-Q for the 

third quarter ended September 30, 2015.  In this filing, Alere disclosed that it had discovered and 

corrected certain out-of-period errors related to 2014 in Q3 2015 associated with accounting for 

U.S. taxes on foreign earnings.  In the Form 10-Q for Q3 2015, Alere expanded its disclosure of 

the material weakness which existed at December 31, 2014 to: 

We did not maintain a sufficient complement of resources with adequate experience and 

expertise in accounting for income taxes, as a result of which our accounting controls did 

not operate at a level of precision to identify errors in the calculation of tax balances 

resulting from dispositions and U.S. taxes on foreign earnings. 

56. On November 13, 2015, Alere filed another Form 10-K/A for 2014 to restate its 

previously filed financial statements.  The Form 10-K/A incorporated the expanded material 

weakness disclosure described in the Form 10-Q filed five days before. 

Alere Recorded Improper Payments  

from BioSystems to a Government Official in Colombia 

57. During 2007 and 2008, Alere purchased a private Colombian distributer of Alere 

products called BioSystems, S.A., ultimately renaming it Alere Colombia in 2016.  In 

conjunction with the acquisition, Alere installed Biosystems’ former primary shareholder and 

owner as Biosystems’ General Manager (the “Colombia GM”).   

Period
 Previously Reported 

Net Income (Loss) 
 Adjustment 

 Net Income (Loss) As 

Restated / Revised 

FY 2014 9,948$                          (47,658)$                       (37,710)$                       

FY 2013 (70,278)                         (1,455)                          (71,733)                         

FY 2012 (77,907)                         (310)                             (78,217)                         



 12 

58. Biosystems’ customers included a set of entities known as an Entidad Promotora 

de Salud, or EPS, which provided health insurance services for their members.  These entities 

were created by Colombian law as part of the Colombian government’s efforts to provide 

universal health benefits to its citizens.  Under this system, EPSs were responsible for organizing 

and guaranteeing the provision of health services for their enrolled participants and managing 

their participants’ health risks.  Among other things, EPSs contracted for health services on 

behalf of their participants through a network of public, private, and their own health service 

providers.  EPSs were both private and government controlled. 

59. From at least 2006, Biosystems sold products to an EPS that operated as a private 

entity (the “Customer EPS”).  Biosystems’ contact at the Customer EPS was a management level 

employee (“the “Customer EPS Manager”) responsible for, among other things, recommending 

and approving products – including Biosystems’ products – for the Customer EPS to purchase 

and provide to its enrolled participants.  The Colombia GM oversaw the Customer EPS account 

and dealt directly with the Customer EPS Manager. 

60. During 2011 through 2013, due to allegations of mismanagement at the Customer 

EPS, the Government of Colombia, acting through the Ministry of Health, took control and 

direction of the Customer EPS.  During this time, the Customer EPS was an instrumentality of 

the Government of Colombia and its employees were officials of the Government of Colombia.  

In 2013, the Ministry of Health began dissolving the Customer EPS and transferring its members 

to another EPS. 

61. From 2007 through at least 2012, Biosystems, at the direction of the Colombia 

GM, made improper payments totaling approximately $275,000 to the Customer EPS Manager 

in order to obtain and retain business from the Customer EPS.  The payments began at least six 

months before Alere acquired Biosystems.  Biosystems disguised these improper payments as 

payments for purported consulting services from the Customer EPS Manager’s husband, sister-

in-law, and friend.  In fact, none of the recipients of these improper payments performed 

legitimate consulting services for Biosystems sufficient to justify the amount of payments 

received. 

62. From 2011 through 2013, Biosystems sold approximately $7.6 million of products 

to the Customer EPS.  During this time, the Customer EPS Manager continued in her position at 

the Customer EPS and remained responsible for recommending Biosystems’ products to the 

Customer EPS.  From 2011 through 2013, Biosystems earned approximately $3.18 million in 

profits from the approximate $7.6 million in sales to the Customer EPS.  In 2013, the Colombia 

GM hired the Customer EPS Manager to work at Biosystems. 

63. In 2015, Alere’s corporate management began an internal investigation into 

consulting payments at Biosystems and discovered the improper payments.  Shortly thereafter, 

the Customer EPS Manager resigned from Biosystems.  The Colombia GM had previously 

resigned from Biosystems in January 2015. 

64. The improper payments to the Customer EPS Manager were recorded as 

legitimate consulting expenses in Biosystems’ books and records.  Biosystems’ books and 



 13 

records were consolidated into Alere’s books and records thereby causing Alere’s books and 

records to be inaccurate.  Alere also failed to devise and maintain an adequate system of 

accounting controls sufficient to prevent and detect the improper payments that occurred over 

several years. 

65. Through the conduct described above, Alere violated Sections 13(b)(2)(A) and 

13(b)(2)(B) of the Exchange Act through the inaccurate recording of the payments to the 

Customer EPS’s relations on its books and records, and its failure to devise or maintain internal 

accounting controls sufficient to provide reasonable assurances that its funds would not be used 

to make improper payments in contravention of Alere’s policies. 

Alere India Failed to Maintain Internal Controls  

Against Improper Payments to Government Officials  

 

66. In 2011, an India-based subsidiary of Alere, Alere Medical Pvt. Ltd. (“Alere 

India”), acting through an India-based distributor (“India Distributor”), won a contract to provide 

malaria testing kits to a local governmental entity for a national disease control program. 

67. In early 2012, the India Distributor wrote a letter to Alere India’s then-Vice 

President of Marketing and Sales about the tender.  The India Distributor noted that it had met 

with officials of the local governmental entity who had informed them that if the local 

governmental officials were paid a four percent commission, they would increase the orders 

under the tender from 200,000 to 1,000,000 testing kits.  Alere India’s Vice President of 

Marketing and Sales approved the four percent commission and the India Distributor proceeded 

to incorporate the increased commission amount into the prices for the test kits.  Alere India 

failed to record the additional commission in its books and records. 

68. In August 2012, the India Distributor requested from Alere India a credit memo 

for the commission it had paid the local government officials in connection with the initial 

200,000 test kits it had provided to the local governmental entity.  Around the same time, the 

India Distributor paid Alere India the amounts owed for the 200,000 test kits, but deducted the 

commission paid to the local government officials from the total payment amount.  The India 

Distributor noted the reasons for the deduction on an invoice accompanying the payment. 

69. In December 2012, the new management at Alere India discovered the unpaid 

credit memo associated with the 200,000 test kits.  Alere’s corporate management initiated an 

internal investigation, and it directed Alere India to refuse to issue the requested credit memo.  

Alere India requested and received reimbursement from the India Distributor for increased 

commission the India Distributor had withheld on that order.  Alere, however, retained the 

approximate $150,000 in profits that it obtained from the increased contract. 

70. Through the conduct described above, Alere violated Sections 13(b)(2)(A) and 

13(b)(2)(B) of the Exchange Act through the inaccurate recording of the commissions paid by 

Alere India on its books and records, and its failure to devise or maintain internal accounting 

controls sufficient to provide reasonable assurances that its funds would not be used to make 

improper payments in contravention of Alere’s policies. 



 14 

Alere Offered Securities 

71. During the relevant period, Alere issued shares through a number of employee 

share purchase programs offered to employees.  Also during the relevant period, Alere issued 

debt securities, including, on June 24, 2015, Alere completed an offering of $425 million of 

6.375% senior subordinated notes due in 2023.  Alere also issued senior notes on December 11, 

2012 and May 24, 2013. 

Violations 

72. Section 10(b) of the Exchange Act and Rule 10b-5 thereunder prohibit fraudulent 

conduct in connection with the purchase and sale of a security.  As a result of the conduct 

described above related to early sales at SD, Alere violated Section 10(b) of the Exchange Act 

and Rule 10b-5 thereunder. 

73. Section  17(a) of the Securities Act prohibits fraudulent conduct in the offer and 

sale of securities.  As a result of the conduct described above, Alere violated Section 17(a) of the 

Securities Act. 

74. Section13(a) of the Exchange Act requires issuers of securities registered pursuant 

to Section 12 of the Exchange Act to file periodic and other reports with the Commission.  With 

exceptions not applicable here, Rules 13a-1, 13a-11, and 13a-13 of the Exchange Act require 

each issuer to file annual, current,  and quarterly reports respectively on the appropriate forms 

and within the period specific on the form.  Rule 12b-20 further requires that the required reports 

contain such further material information, if any, as may be necessary to make the required 

statements, in light of the circumstances under which they are made not misleading.  As a result 

of the conduct described above, Alere violated Section 13(a) of the Exchange Act and Rules 12b-

20, 13a-1, 13a-11, and 13a-13 thereunder. 

75. Section 13(b)(2)(A) of the Exchange Act requires issuers of securities registered 

pursuant to Section 12 of the Exchange Act to make and keep books, records and accounts, 

which, in reasonable detail, accurately and fairly reflect their transactions and dispositions of 

their assets.  As a result of the conduct described above, Alere violated Section 13(b)(2)(A) of 

the Exchange Act. 

76. Section  13(b)(2)(B) of the Exchange Act requires issuers of securities registered 

pursuant to Section 12 of the Exchange Act to, among other things, devise and maintain a system 

of internal accounting controls sufficient to provide reasonable assurances that transactions are 

recorded as necessary to permit preparation of financial statements in accordance with generally 

accepted accounting principles and that transactions are executed in accordance with 

management’s general or specific authorization.  As a result of the conduct described above, 

Alere violated Section 13(b)(2)(B) of the Exchange Act. 

IV. 

 

 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 

agreed to in Respondent Alere’s Offer. 



 15 

 

 Accordingly, pursuant to Section 8A of the Securities Act and Section 21C of the 

Exchange Act, it is hereby ORDERED that: 

 

A. Respondent Alere shall cease and desist from committing or causing any 

violations and any future violations of Sections 10(b), 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the 

Exchange Act and Rules 10b-5, 12b-20, 13a-1, 13a-11, and 13a-13thereunder, and Section 17(a) 

of the Securities Act.     

 

B. Respondent shall, within 14 days of the entry of this Order, pay a civil money 

penalty of $9,200,000, disgorgement of $3,328,689, and prejudgment interest of $495,196 to the 

Securities and Exchange Commission for transfer to the general fund of the United States 

Treasury, subject to  Exchange Act Section 21F(g)(3).  If timely payment is not made, additional 

interest shall accrue pursuant to SEC Rule of Practice 600 and 31 U.S.C. §3717.   

Payment must be made in one of the following ways:   

(1) Respondent may transmit payment electronically to the Commission, 

which will provide detailed ACH transfer/Fedwire instructions upon 

request;  

(2) Respondent may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  

(3) Respondent may pay by certified check, bank cashier’s check, or United 

States postal money order, made payable to the Securities and Exchange 

Commission and hand-delivered or mailed to:  

Enterprise Services Center 

Accounts Receivable Branch 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

 

Payments by check or money order must be accompanied by a cover letter identifying 

Alere, Inc. as a Respondent in these proceedings, and the file number of these proceedings; a 

copy of the cover letter and check or money order must be sent to Associate Director John 

T.Dugan, Division of Enforcement, Securities and Exchange Commission, Boston Regional 

Office, 33 Arch Street, 24
th

 Floor, Boston, MA 02110.   

 

C. Amounts ordered to be paid as civil money penalties pursuant to this Order shall 

be treated as penalties paid to the government for all purposes, including all tax purposes.  To 

preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 

Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any 

award of compensatory damages by the amount of any part of Respondent’s payment of a civil 

penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants such 

http://www.sec.gov/about/offices/ofm.htm


 16 

a Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order 

granting the Penalty Offset, notify the Commission's counsel in this action and pay the amount of 

the Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be 

deemed an additional civil penalty and shall not be deemed to change the amount of the civil 

penalty imposed in this proceeding.  For purposes of this paragraph, a “Related Investor Action” 

means a private damages action brought against Respondent by or on behalf of one or more 

investors based on substantially the same facts as alleged in the Order instituted by the 

Commission in this proceeding. 

 By the Commission. 

 

 

 

       Brent J. Fields 

       Secretary