In re Biomet

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UNITED STATES OF AMERICA 
Before the 
SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 79780 / January 12, 2017 
 
ACCOUNTING AND AUDITING ENFORCEMENT 
Release No. 3843 / January 12, 2017 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-17771 
 
 
In the Matter of 
 
Biomet, Inc. 
 
Respondent. 
 
 
 
 
ORDER INSTITUTING CEASE-AND-
DESIST PROCEEDINGS PURSUANT TO 
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 that cease-
and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities 
Exchange Act of 1934 (“Exchange Act”), against Biomet, Inc. (“Biomet” or “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, Respondent admits the Commission’s 
jurisdiction over it and the subject matter of these proceedings, and consents to the entry of this 
Order Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities 
Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order (“Order”), as 
set forth below. 

 
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III. 
 
 On the basis of this Order and Respondent’s Offer, the Commission finds
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 that:  
 
  Summary  
 
1. These proceedings arise from violations of the Foreign Corrupt Practices Act of 
1977 (the “FCPA”) [15 U.S.C. 78dd] by Respondent Biomet, Inc., a global medical device 
company with operations around the world.  From approximately 2008 through 2013, Biomet, 
through its subsidiary and third party customs brokers, made unlawful payments to Mexican 
customs officials to facilitate the importation of Biomet’s unregistered and mislabeled dental 
products into Mexico.  In addition, from 2009 to 2013, Biomet improperly recorded transactions 
with a known prohibited distributor in Brazil as transactions with another distributor.  Biomet had 
prohibited the use of the distributor after determining the distributor made improper payments to 
public doctors in Brazil from 2000 to August 2008 to obtain sales of Biomet products, which was 
the subject of Biomet’s 2012 settlement with the Commission and criminal authorities for FCPA 
violations.  Biomet could not account for the prohibited distributor’s use of certain funds nor 
determine if the prohibited distributor had continued the same improper conduct.  Biomet failed to 
appropriately record the transactions in Mexico and Brazil in its books and records.  Biomet also 
failed to devise and maintain a sufficient system of internal accounting controls.     
Respondent  
 
2. Biomet, Inc. is a medical device company headquartered in Warsaw, Indiana that 
sells medical device and dental products.  Prior to 2008, Biomet’s common stock was registered 
with the Commission pursuant to Section 12(b) of the Exchange Act.  In September 2007, Biomet 
was acquired by a group of private equity funds and went private.  Biomet subsequently filed a 
Form S-1 that went effective in May 2008 and was therefore required pursuant to Rule 15(d) to file 
periodic reports with the Commission.   
 
3. In a March 2012 settlement with the Commission, Biomet consented to a 
permanent injunction against future violations of Sections 30A, 13(b)(2)(A), and 13(b)(2)(B) of the 
Exchange Act, as well as the appointment of an independent compliance monitor for a period of 
three years, for FCPA violations in multiple countries. 
 
4. In June 2015, Biomet was acquired by Zimmer Holdings, Inc. (“Zimmer”), and the 
combined companies were renamed Zimmer Biomet Holdings, Inc.  The new company remained 
headquartered in Warsaw, Indiana.  Zimmer Biomet began trading on the New York Stock 
Exchange and the SIX Swiss Exchange under the ticker symbol “ZBH” on June 29, 2015.  Zimmer 
                                                 
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  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.   
 

 
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Biomet operates in more than 100 countries, has approximately 17,000 employees, and in fiscal 
year 2015, reported revenue of $ 6 billion.   
 
Relevant Entities 
5. Biomet 3i LLC (“Biomet 3i”) is a wholly owned subsidiary of Biomet, Inc., 
located in Palm Beach Gardens, Florida, that sold dental implants in various countries, including 
Brazil and Mexico.  Biomet 3i’s books and records were consolidated into the books and records of 
Biomet. 
 
6. Biomet 3i Mexico (“3i Mexico”) is a Mexico City, Mexico based business 
operation of Biomet 3i, a U.S. subsidiary of Biomet, Inc.  Biomet 3i conducted all of its sales in 
Mexico through 3i Mexico.  3i Mexico’s books and records were ultimately consolidated into 
Biomet’s books and records. 
 
7. Biomet International Corporation (“Biomet International”) is a Delaware 
corporation and a wholly-owned subsidiary of Biomet.  Biomet conducts sales of Biomet products 
in Brazil through Biomet International.  Biomet International’s books and records are consolidated 
into Biomet’s books and records. 
 
8. Mexican Customs Broker is a private company registered in Mexico that acted as 
3i Mexico’s primary customs broker from April 2010 to October 2013.  3i Mexico did not have a 
written contract or fee schedule with Mexican Customs Broker during this time. 
 
9. Texas Customs Broker is a private company based in Mission, Texas.  Texas 
Customs Broker served as 3i Mexico’s customs broker until mid-2009.  Texas Customs Broker 
was not a licensed customs broker, and 3i Mexico did not have a written contract or fee schedule 
with the company. 
 
10. Prohibited Brazilian Distributor was the individual owner of a Brazilian 
company that served as Biomet’s exclusive authorized distributor for reconstructive products in 
Brazil until 2008, when Biomet terminated the relationship due to prior FCPA violations.   
 
Prior Commission Action 
 
11. In March 2012, the SEC filed a settled injunctive action against Biomet for 
violations of the anti-bribery, books and records, and internal controls provisions of the federal 
securities laws.  The complaint alleged that, from 2000 through August 2008, Biomet, through four 
subsidiaries, paid bribes to public doctors employed by public hospitals and agencies in Argentina, 
Brazil, and China.  One of the largest schemes involved Biomet’s sales of medical devices in 
Brazil through its U.S. subsidiary, Biomet International.  Biomet International employees engaged 
in a scheme in which its Brazilian distributor, through his company, paid bribes to doctors 
employed by state-owned hospitals in the form of “commissions” of 10-20% of the value of 
medical devices purchased by the doctors, since as early as 2001.  As part of its settlement with the 
SEC, Biomet agreed to terminate its relationship with the distributor (“Prohibited Brazilian 

 
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Distributor”).  In 2009, Biomet re-entered the Brazilian market and hired new Brazilian distributors 
to sell its medical implants.  Biomet subsequently notified the Commission staff that sales of 
Biomet products into Brazil would be done by these new authorized distributors.   
 
12. Biomet paid $5.5 million in disgorgement and prejudgment interest, and was 
ordered to retain an independent compliance monitor to review its compliance program.  At the 
same time, Biomet entered into a deferred prosecution agreement (“DPA”) with the Department of 
Justice that imposed a criminal fine of $17,280,000 and the appointment of a monitor. 
 
13. After the settlement and pursuant to the monitor’s recommendations, Biomet took 
steps to enhance its compliance program, including conducting trainings, hiring additional 
compliance resources, and implementing new policies and controls.  Biomet reported its remedial 
steps to Commission staff and the monitor on a periodic basis.  In 2013, Biomet reported to the 
Commission staff and the monitor suspected instances of continued anti-bribery violations, 
including conduct in Brazil and Mexico.  Biomet retained outside counsel to conduct an 
investigation.  Subsequently, in June 2015, Biomet was acquired by Zimmer, and Zimmer began a 
process to fully integrate the legacy Biomet entity into a newly combined compliance program.  
Despite extending the monitorship by one year, the monitor ultimately was unable to certify that 
the legacy Biomet entity had a fully operational and effective compliance program as a result of the 
acquisition and the recurring compliance issues in Brazil and Mexico.  The monitorship terminated 
in March 2016.     
 
Biomet Continues Use of Prohibited Brazilian Distributor  
14. Despite telling the government that it had terminated its relationship with 
Prohibited Brazilian Distributor in 2008, Biomet continued to sell goods into Brazil through 
Prohibited Brazilian Distributor through 2013.  Biomet International recorded the transactions with 
Prohibited Brazilian Distributor on its books and records as if they were transactions with their 
authorized distributor.  Biomet did not take any action to stop the conduct until it received a 
whistleblower complaint at the end of 2013, and initiated an internal investigation. 
 
15. As early as 2009, Biomet conducted an internal audit of its Brazilian distributors 
that identified a relationship between its authorized distributor and Prohibited Brazilian 
Distributor’s company.  The draft audit report recommended that the authorized distributor needed 
to be fully separated from Prohibited Brazilian Distributor’s company.  However, the 
recommendation and references to Prohibited Brazilian Distributor’s company were removed from 
the final report by a member of Biomet’s legal team and the issue was not tracked for follow up by 
anyone in Biomet’s legal, compliance, or internal audit departments, thereby allowing the 
relationship to continue for several more years.  
 
16. By at least April 2010, Biomet became aware that the owner of one of Biomet’s 
authorized distributors had given over control of the company to Prohibited Brazilian Distributor.
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  At the time that Biomet entered into distribution agreements with the new Brazilian distributors, Biomet 
was aware that each of these new distributors was owned and operated by former partners of Prohibited Brazilian 

 
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A Biomet employee even described the relationship in documents as the “[authorized distributor] = 
[Prohibited Brazilian Distributor]”.   Further, in June 2010, Prohibited Brazilian Distributor entered 
into a consulting agreement with the authorized distributor.  The Prohibited Brazilian Distributor’s 
compensation under the agreement was tied to increases in Biomet product sales.  Certain Biomet 
senior employees were aware of this consulting relationship as early as June 2010 and failed to 
take steps to stop the relationship. 
 
17. Thereafter, in July 2010, the authorized distributor informed Biomet that it faced 
importation restrictions in Brazil, but suggested a means to work around the restrictions by 
arranging for Prohibited Brazilian Distributor, which continued to hold Biomet product 
registrations, to directly import Biomet products on behalf of the authorized distributor.  Biomet 
approved the proposed importation arrangement.  With Biomet’s knowledge and consent, the 
authorized distributor placed product orders with Biomet and provided cash to Prohibited Brazilian 
Distributor to cover the customs, duties, and product costs.  Prohibited Brazilian Distributor used a 
portion of the cash to pay customs and transferred the rest to his personal bank account.  Biomet 
then received wire transfers from Prohibited Brazilian Distributor’s personal bank account relating 
to the shipments, but credited the payments to invoices issued to the authorized distributor. 
 
18. In addition, between July 2012 and September 2013, the authorized distributor paid 
Prohibited Brazilian Distributor and/or his company approximately $3 million in product 
purchases, $2 million for which Biomet could not determine the purpose, and $30,000 for an 
apartment used by Prohibited Brazilian Distributor in Sao Paulo.  Furthermore, despite knowing of 
the prohibition against further dealings with Prohibited Brazilian Distributor, certain Biomet 
employees continued to meet with Prohibited Brazilian Distributor for business purposes, and 
allowed Prohibited Brazilian Distributor to attend several Biomet sales events between 2010 and 
2013.   
 
19. Despite clear knowledge that Prohibited Brazilian Distributor was acting as its 
distributor since 2009, Biomet recorded the business transactions as if they were transactions with 
their authorized distributor.  From July 2009 to September 2013, Biomet obtained over $3,168,000 
in profits from the transactions involving the Prohibited Brazilian Distributor.   
 
Sale of Unregistered and Mislabeled Products into Mexico 
20. Until mid-2009, both 3i Mexico and another Biomet subsidiary, Biomet Mexico, 
imported products into Mexico via Laredo, Texas, using Texas Customs Broker.  Texas Customs 
Broker was an unlicensed customs broker and Biomet did not have a written contract or fee 
schedule with the broker.  In January 2009, Biomet 3i employees received emails indicating that 3i 
Mexico planned to import unregistered product into Mexico through Laredo.  One such email from 
the head of 3i Mexico, a Mexican national based in Mexico, stated “In the airport of Mexico, 
                                                                                                                                                             
Distributor.  Biomet failed to appropriately assess the risks posed by the connection between Prohibited Brazilian 
Distributor and his former partners and did not take steps to monitor changes in the ownership structure of the new 
distributors.  

 
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customs are stricter and the importing is more complicated.  At the Texas border, since it is a land 
border, it is less strict and they do not request all the documents.”   
21. Subsequently, Biomet investigated the Texas Customs Broker as part of a broader 
compliance assessment to be performed by an outside auditing firm.  The auditor’s report noted 
that “Biomet Mexico was found to still be using a certain customs consultant ([Texas Customs 
Broker]) for expediting Biomet products through the Mexico/US border that was previously 
determined by Biomet Corporate to be of higher risk.”  The auditor’s report also noted that Biomet 
lacked “due diligence procedures regarding distributors and custom agents/consultants and a 
formal process related to their selection,” causing internal controls risks.  The report recommended 
that Biomet establish formal policies and procedures regarding vendor due diligence. 
 
22. Biomet Mexico senior management were aware that Texas Customs Broker was 
able to “import limited quantities of certain instruments without obtaining a Mexican product 
license...” and that the Texas Customs Broker would simply “physically cross the border in [his] 
own vehicles with Biomet’s product.”  The Texas Customs Broker was essentially smuggling the 
goods over the border. 
 
23. Based on the findings in the auditor’s report, which alerted Biomet to significant 
red flags about the ongoing use of an unlicensed customs broker circumventing customs 
requirements for the purpose of importing unregistered products, Biomet instructed Biomet 
Mexico and 3i Mexico to cease working with Texas Customs Broker.   
 
24. In April 2010, to replace Texas Customs Broker, 3i Mexico hired Mexican 
Customs Broker as its primary customs broker, but again did not enter into a written contract or fee 
schedule.  Mexican Customs Broker served as 3i Mexico’s primary customs broker through 
October 2013.   
 
25. In early 2010, 3i Mexico began experiencing problems importing product at the 
Mexico City International Airport because of missing registrations and incorrect labels on 
products.  Biomet 3i Mexico senior management suggested shipping such products through 
Laredo, Texas instead.  Senior Biomet and Biomet 3i personnel across multiple departments, 
including legal, regulatory, compliance, and finance, were aware of the problems importing goods 
through Mexico City.  Senior Biomet 3i employees approved a proposed solution to ship through 
Laredo because of its more lax customs procedures.  Biomet 3i Mexico began working with 
Mexican Customs Broker to import the unregistered and mislabeled products from Biomet 3i’s 
Palm Beach Gardens location into Mexico through Laredo, Texas.  Despite subsequently 
confirming in July 2012 with its regulatory consultant that it was illegal both to import into Mexico 
and sell within Mexico unregistered product, Biomet 3i  allowed certain shipments to continue 
after July 2012, as well as permitted the sale of unregistered product that had already entered 
Mexico. 
 

 
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26. To address these importation issues, with the knowledge of the head of 3i Mexico, 
Mexican Customs Broker divided shipment items based on whether they had valid registrations 
and proper labeling.  Mexican Customs Broker imported the registered products through the 
Mexico City airport, while hiring sub-agents to smuggle the unregistered and mislabeled product 
through Laredo by paying bribes to Mexican customs officials at the border.  Once the divided 
items entered Mexico, Mexican Customs Broker would recombine them and deliver the complete 
shipment to 3i Mexico. 
 
27. Mexican Customs Broker through its sub-agents made improper payments to 
Mexican customs officials when necessary to import the sub-agent shipments with the knowledge 
and approval of the head of 3i Mexico.  To facilitate these payments, Mexican Customs Broker 
provided separate invoices to Biomet 3i Mexico for services rendered by Mexican Customs Broker 
and by its sub-agents.  A Biomet 3i Mexico employee based in Mexico omitted references to the 
sub-agents when entering the payments into Biomet’s accounting system, and recorded the 
payments to the sub-agents as though they were payments to Mexican Customs Broker. 
 
28. From approximately April 2010 to September 2013, Biomet paid Mexican Customs 
Broker approximately $549,000 and its sub-agents $981,000.  The payments to Mexican Customs 
Broker’s sub-agents were unusually large and lacked supporting documentation, containing only 
one-line invoices for unspecified “Professional Services” or “Consulting and Logistics.”  Mexican 
Customs Broker’s invoices, which were not supported by any fee schedule agreed upon between 3i 
Mexico and Mexican Customs Broker or any other details, included simply line items such as 
“Servicio Especial” or “Servicio Extraordinario” (Special or Extraordinary Service), “Cruce de 
Puente” (Bridge Crossing Fee), or “Cuenta Americana,” (American Account).  These unsupported 
and/or improper charges from Mexican Customs Broker and its sub-agents were improperly 
recorded under a Costo de Fletes (Freight Cost) account.   
 
29. From 2008 to 2013, Biomet obtained $2,652,100 in profits from the transactions 
involved in the Mexico scheme. 
 
Anti-Bribery Violations 
 
30. Biomet subsidiary 3i Mexico engaged Mexican Customs Broker and certain sub-
agents to pay bribes to Mexican customs officials for the purpose of circumventing Mexican 
customs laws regarding importing unregistered and improperly labeled products into Mexico.  
Biomet the parent saw numerous red flags indicating that the Mexican subsidiary’s customs agents 
were using bribes to resolve the known Mexican customs issues.  Biomet had already instructed 
Biomet Mexico and 3i Mexico to terminate a relationship with Texas Customs Broker after 
numerous red flags were identified indicating Texas Customs Broker was likely smuggling 
unregistered products over the border.  3i Mexico subsequently failed to conduct adequate due 
diligence in the hiring of Mexican Customs Broker and its sub-agents as a replacement, or to 
require a written contract or fee schedule.  Further, Biomet employees across multiple levels and 
departments were aware of importation issues arising in Mexico and failed to question how 
Mexican Customs Broker was managing to overcome such issues while other Biomet employees 

 
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based in Mexico knew that bribes were being paid at the border.  Biomet was on notice of 
substantial compliance risks based in part on the outside auditor report since as early as 2008, and 
failed to take steps to detect and prevent the ongoing bribery.  As a result of the bribery of Mexican 
customs officials, Biomet violated Section 30A of the Exchange Act. 
 
Failure to Maintain Accurate Books and Records 
 
31. In Brazil, over the period July 2009 to September 2013, Biomet improperly 
recorded in its books and records payments to Prohibited Brazilian Distributor as payments to 
another authorized distributor.  In Mexico, a Biomet subsidiary engaged two agents, one who was 
unlicensed,  to smuggle goods across the border.  One of the agents paid bribes to Mexican 
customs officials.  Biomet improperly recorded payments to both agents between 2010 and 2013 in 
excess of $1.5 million, including $981,000 in payments to sub-agents that was actively concealed 
in Biomet’s books and records.  The payments were recorded as freight cost and as other legitimate 
costs, which did not reflect the true nature of those payments.  Biomet violated Section 13(b)(2)(A) 
by improperly recording the transactions and payments in Brazil and Mexico in its accounting 
books and records.   
 
Failure to Maintain Sufficient Internal Accounting Controls 
 
32. Biomet failed to implement internal accounting controls sufficient to detect or 
prevent bribery and to ensure the accuracy of its books and records.  Biomet’s ongoing business 
ties to Prohibited Brazilian Distributor were known to Biomet employees as early as December 
2009 and Biomet failed to take appropriate steps to stop the continued prohibited relationship.  
Biomet improperly recorded its business transactions with Prohibited Brazilian Distributor as 
transactions with its authorized distributor.  Biomet violated Section 13(b)(2)(B) of the Exchange 
Act by failing to have internal controls in place to detect and prevent Biomet’s improper recording 
of transactions with the Prohibited Brazilian Distributor.  
 
 33. Biomet further failed to devise and maintain internal accounting controls to prevent 
and detect 3i Mexico’s payments to Texas Customs Broker and Mexican Customs Broker  to get 
product without valid registrations or proper labeling into Mexico, including improper payments to 
Mexican customs officials made by Mexican Customs Broker.  Biomet directed 3i Mexico to 
terminate its arrangement with Texas Customs Broker and to hire a new broker.  However, 3i 
Mexico failed to conduct due diligence on Mexican Customs Broker and failed to get a written 
contract or fee schedule.  Biomet failed to address the numerous red flags that bribery was 
occurring to import its goods into Mexico.  Biomet’s internal accounting controls did not prevent 
and detect the improper payments totaling approximately $981,000 between 2010 and 2013.    
 
Legal Standards and Violations 
34. As a result of the conduct described above, Biomet violated Section 30A of the 
Exchange Act, which makes it unlawful for an issuer with securities registered under Section 12 of 
the Exchange Act or which is required to file reports under Section 15(d) of the Exchange Act, or 
any employee or agent acting on its behalf, to make use of the mails or any means or 

 
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instrumentality of interstate commerce corruptly in furtherance of an effort to pay or offer to pay 
anything of value to foreign officials for the purpose of influencing their official decision-making, 
in order to assist in obtaining or retaining business.   
35. Further, as a result of the conduct described above, Biomet violated Section 
13(b)(2)(A) of the Exchange Act, which requires issuers to make and keep books, records, and 
accounts which, in reasonable detail, accurately and fairly reflect their transactions and dispositions 
of the assets of the issuer.  
 36. In addition, as a result of the conduct described above, Biomet violated Section 
13(b)(2)(B) of the Exchange Act, which requires issuers to devise and maintain a system of 
internal accounting controls sufficient to provide reasonable assurances that (i) transactions are 
executed in accordance with management’s general or specific authorization; (ii) transactions are 
recorded as necessary (I) to permit preparation of financial statements in conformity with generally 
accepted accounting principles or any other criteria applicable to such statements, and (II) to 
maintain accountability for assets; (iii) access to assets is permitted only in accordance with 
management’s general or specific authorization; and (iv) the recorded accountability for assets is 
compared with the existing assets at reasonable intervals and appropriate action is taken with respect 
to any differences.   
 
Remedial Actions and Undertakings  
 
 37. In determining to accept the Offer, the Commission considered Respondent’s 
cooperation and remedial acts.   
 
 38. Respondent undertakes to engage an Independent Compliance Monitor pursuant to 
the provisions set forth in Attachment A of the Order.  
  
 39. Respondent undertakes to require the Independent Compliance Monitor to enter 
into an agreement that provides that for the period of engagement and for a period of two years 
from completion of the engagement, the Independent Compliance Monitor shall not enter into any 
employment, consultant, attorney-client, auditing or other professional relationship with 
Respondent, or any of its present or former affiliates, directors, officers, employees, or agents 
acting in their capacity.  The agreement will also provide that the Independent Compliance 
Monitor will require that any firm with which he/she is affiliated or of which he/she is a member, 
and any person engaged to assist the Independent Compliance Monitor in performance of his/her 
duties under this Order shall not, without prior written consent of the Division of Enforcement, 
enter into any employment, consultant, attorney-client, auditing or other professional relationship 
with Respondent, or any of its present or former affiliates, directors, officers, employees, or agents 
acting in their capacity as such for the period of the engagement and for a period of two years after 
the engagement. 
 
 40. Certify, in writing, compliance with the undertaking(s) set forth above.  The 
certification shall identify the undertaking(s), provide written evidence of compliance in the form 
of a narrative, and be supported by exhibits sufficient to demonstrate compliance.  The 

 
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Commission staff may make reasonable requests for further evidence of compliance, and 
Respondent agrees to provide such evidence.  The certification and supporting material shall be 
submitted to Kara Novaco Brockmeyer, FCPA Unit Chief, Division of Enforcement, U.S. 
Securities and Exchange Commission, 100 F Street, N.E., Mail Stop 5631, Washington, D.C. 
20549, with a copy to the Office of Chief Counsel of the Enforcement Division, no later than sixty 
(60) days from the date of the completion of the undertakings.    
 
 
 41. Respondent undertakes to do the following:  in connection with this action and any 
related judicial or administrative proceeding or investigation commenced by the Commission or to 
which the Commission is a party, Respondent (i) agrees to appear and be interviewed by 
Commission staff at such times and places as the staff requests upon reasonable notice; (ii) will 
accept service by mail or facsimile transmission of notices or subpoenas issued by the Commission 
for documents or testimony at depositions, hearings, or trials, or in connection with any related 
investigation by Commission staff; (iii) appoints Respondent's undersigned attorney as agent to 
receive service of such notices and subpoenas; (iv) with respect to such notices and subpoenas, 
waives the territorial limits on service contained in Rule 45 of the Federal Rules of Civil Procedure 
and any applicable local rules, provided that the party requesting the testimony reimburses 
Respondent's travel, lodging, and subsistence expenses at the then-prevailing U.S. Government per 
diem rates; and (v) consents to personal jurisdiction over Respondent in any United States District 
Court for purposes of enforcing any such subpoena. 
  
Deferred Prosecution Agreement 
 
 42. Zimmer Biomet will enter into a deferred prosecution agreement with the 
Department of Justice that acknowledges responsibility for criminal conduct relating to the 
findings in the Order.  Specifically, Zimmer Biomet acknowledges responsibility for Biomet’s 
violations of the internal controls provisions of the Foreign Corrupt Practices Act of 1977 
(“FCPA”), as amended, 15 U.S.C. §§ 78m(b)(2)(B), 78m(b)(5), and 78ff(a).  Further, Jerds 
Luxembourg Holding, S.AR.L., the direct parent company of Biomet 3i Mexico, will enter into a 
guilty plea for causing violations of the FCPA’s books and records provisions, 15 U.S.C. §§ 
78m(b)(2)(A).  Zimmer Biomet has agreed to pay a criminal fine of $17,460,300 in connection 
with the deferred prosecution agreement.  
 
IV. 
 
 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 
agreed to in Respondent Biomet’s Offer. 
 
 Accordingly, it is hereby ORDERED that: 
 
 A. Pursuant to Section 21C of the Exchange Act, Respondent Biomet cease and desist 
from committing or causing any violations and any future violations of Sections 13(b)(2)(A), 
13(b)(2)(B) and 30A of the Exchange Act [15 U.S.C. §§ 78m(b)(2)(A), 78m(b)(2)(B), and 78dd-1]. 

 
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 B. Respondent will comply with its Undertakings as enumerated in paragraphs 38 to 41 
above.  
 
 C. Respondent shall, within fourteen days of the entry of this Order, pay disgorgement 
of $5,820,100, prejudgment interest of $702,705, and a civil penalty of $6,500,000, for total 
payment of $13,022,805 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 payment of 
disgorgement and prejudgment interest is not made by the date the payment is required by this 
Order, additional interest shall accrue pursuant to SEC Rule of Practice 600, and if payment of the 
civil penalty is not made by the date the payment is required by this Order, additional interest shall 
accrue pursuant to 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 
Biomet 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 Tracy L. Price, Assistant Director, 
Division of Enforcement, Securities and Exchange Commission, 100 F St., NE, Washington, DC 
20549-5631. 
 
 
 By the Commission. 
 
 
 
       Brent J. Fields 
       Secretary 

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Attachment A 
Independent Compliance Monitor 
Retention of Monitor and Term of Engagement 
 1. Zimmer Biomet (“Company”) shall engage an independent compliance monitor 
(the “Monitor”) not unacceptable to the staff of the Commission within sixty (60) calendar days of 
the issuance of the Order.  The Monitor shall have, at a minimum, the following qualifications: (i) 
demonstrated expertise with respect to the FCPA and other applicable anti-corruption laws, 
including experience counseling on FCPA issues; (ii) experience designing or reviewing corporate 
compliance policies, procedures, and internal accounting controls, including FCPA and anti-
corruption policies and procedures; (iii) the ability to access and deploy resources as necessary to 
discharge the Monitor’s duties; and (iv) sufficient independence from the Company to ensure 
effective and impartial performance of the Monitor’s duties.  The Commission staff may extend the 
Company’s time period to retain the Monitor, in its sole discretion.  If the Monitor resigns or is 
otherwise unable to fulfill the obligations herein, the Company shall within forty-five (45) days 
retain a successor Monitor that has the same minimum qualifications as the original monitor and 
that is not unacceptable to the Commission staff.   
 2. The Company shall retain the Monitor for a period of not less than thirty-six (36) 
months, unless the Commission staff finds, in its sole discretion, that there exists a change in 
circumstances sufficient to eliminate the need for the Monitor, in which case the Monitorship may 
be terminated early (the “Term of the Monitorship”).  The term of the Monitorship can be extended 
as set forth in Paragraph 26, below.  The Company shall provide the Commission staff with a copy 

 
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of the agreement detailing the scope of the Monitor’s responsibilities within thirty (30) days after 
the Monitor is engaged.  
 3. During the Term of the Monitorship and for a period of two years from the 
conclusion of the Monitorship, neither the Company nor any of its then-current or former affiliates, 
subsidiaries, directors, officers, employees, or agents acting in their capacity as such shall enter 
into, or discuss the possibility of, any employment, consultant, attorney-client, auditing, or other 
professional relationship with the Monitor.   
Company’s Obligations 
 4. The Company shall cooperate fully with the Monitor and provide the Monitor with 
access to all non-privileged information, documents, books, records, facilities, and personnel as 
reasonably requested by the Monitor; such access shall be provided consistent with the Company’s 
and the Monitor’s obligations under applicable local laws and regulations, including but not limited 
to, applicable data privacy and national security laws and regulations.  The Company shall use its 
best efforts, to the extent reasonably requested, to provide the Monitor with access to the 
Company’s former employees, third party vendors, agents, and consultants.  The Company does 
not intend to waive the protection of the attorney work product doctrine, attorney-client privilege, 
or any other privilege applicable as to third parties. 
 5. The parties agree that no attorney-client relationship shall be formed between the 
Company and the Monitor.  In the event that the Company seeks to withhold from the Monitor 
access to information, documents, books, records, facilities, current or former personnel of the 
Company, its third-party vendors, agents, or consultants that may be subject to a claim of attorney-
client privilege or to the attorney work-product doctrine, or where the Company reasonably 

 
 3 
believes production would otherwise be inconsistent with the applicable law, the Company shall 
work cooperatively with the Monitor to resolve the matter to the satisfaction of the Monitor.  If, 
during the Term of the Monitorship, the Monitor believes that the Company is unreasonably 
withholding access on the basis of a claim of attorney-client privilege, attorney work-product 
doctrine, or other asserted applicable law, the Monitor shall notify the Commission staff. 
 6. Upon entry of this Order and during the Term of the Monitorship, should the 
Company learn of credible evidence or allegations of corrupt payments, false books, records, or 
accounts, or the failure to implement adequate internal accounting controls, the Company shall 
promptly report such evidence or allegations to the Commission staff.  Any disclosure by the 
Company to the Monitor concerning potential corrupt payments, false books and records, or 
internal accounting control issues shall not relieve the Company of any otherwise applicable 
obligation to truthfully disclose such matters to the Commission staff.   
Monitor’s Mandate 
 7. The Monitor shall review and evaluate the effectiveness of the Company’s policies, 
procedures, practices, internal accounting controls, recordkeeping, and financial reporting 
(collectively, “Policies and Procedures”), with a focus on the Company’s legacy Biomet operations 
as integrated into Zimmer Biomet, as they relate to the Company’s current and ongoing 
compliance with the anti-bribery, books and records, and internal accounting controls provisions of 
the FCPA and other applicable anti-corruption laws (collectively, “Anti-corruption Laws”), and 
make recommendations reasonably designed to improve the effectiveness of the Company’s 
internal accounting controls and FCPA corporate compliance program (the “Mandate”).  This 
Mandate shall include an assessment of the Board of Directors’ and senior management’s 

 
 4 
commitment to, and effective implementation of, the FCPA corporate compliance program.  In 
carrying out the Mandate, to the extent appropriate under the circumstances, the Monitor may 
coordinate with the Company personnel, including in-house counsel, compliance personnel, and 
internal auditors.   To the extent the Monitor deems appropriate, it may rely on the Company’s 
processes, and on sampling and testing methodologies.  The Monitor is not expected to conduct a 
comprehensive review of all business lines, all business activities, and all markets.  Any disputes 
between the Company and the Monitor with respect to the Work Plan shall be decided by the 
Commission staff in its sole discretion. 
 8.   During the term of the Monitorship, the Monitor shall conduct three reviews (First 
Review, Second Review, and Third Review), issue a report following each review (First Review 
Report, Second Review Report, and Third Review Report), and issue a Final Certification Report, 
as described below.  The Monitor’s Work Plan for the First Review shall include such steps as are 
reasonably necessary to conduct an effective First Review.  It is not intended that the Monitor will 
conduct its own inquiry into historical events.  In developing each Work Plan and in carrying out 
the reviews pursuant to such plans, the Monitor is encouraged to coordinate with the Company’s 
personnel, including auditors and compliance personnel. 
First Review and Report 
 9. The Monitor shall commence the First Review no later than one hundred twenty 
(120) calendar days from the date of the engagement of the Monitor (unless otherwise agreed by 
the Company, the Monitor, and the Commission staff).   Promptly upon being retained, the 
Monitor shall prepare a written Work Plan, which shall be submitted to the Company and the 
Commission staff for comment no later than sixty (60) days after being retained. 

 
 5 
10. In order to conduct an effective First Review and to understand fully any existing 
deficiencies in the Company’s internal accounting controls and FCPA corporate compliance 
program, the Monitor’s Work Plan shall include such steps as are reasonably necessary to 
understand the Company’s business and its global anti-corruption risks.  The steps shall include: 
(a) inspection of relevant documents, including the internal accounting 
controls, recordkeeping, and financial reporting policies and procedures as 
they relate to the Company’s compliance with the books and records, 
internal accounting controls, and anti-bribery provisions of the FCPA and 
other applicable anti-corruption laws; 
(b) onsite observation of selected systems and procedures comprising the 
Company’s FCPA corporate compliance program, including anti-
corruption compliance procedures, internal accounting controls, 
recordkeeping, due diligence, and internal audit procedures, including at 
sample sites; 
(c) meetings  with, and  interviews  of,  as relevant, the  Company employees, 
officers,  directors,  and,  where  appropriate  and  feasible,  its  third-party 
vendors, agents,  or consultants and  other persons at  mutually convenient 
times and places; and 
(d) risk-based analyses, studies, and testing of the Company’s FCPA 
corporate compliance program. 
11. The Monitor may take steps as reasonably necessary to develop an understanding 
of the facts and circumstances surrounding prior FCPA violations that gave rise to this action 

 
 6 
or violations of other applicable anti-corruption laws, but shall not conduct his or her own 
inquiry into those historical events. 
12. After receiving the First Review Work Plan, the Company and Commission staff 
shall provide any comments concerning the First Review Work Plan within thirty (30) days to the 
Monitor.  Any disputes between the Company and the Monitor with respect to the First Review 
Work Plan shall be decided by the Commission staff in its sole discretion.  Following comments 
by the Company and Commission staff, the Monitor will have fifteen (15) days to submit a Final 
First Review Work Plan. 
13. The First Review shall commence no later than one hundred twenty (120) days 
from the date of the engagement of the Monitor (unless otherwise agreed by the Company, the 
Monitor, and the Commission staff).  The Monitor shall issue a written report within one hundred 
fifty (150) days of commencing the First Review, setting forth the Monitor’s assessment and, if 
necessary, making recommendations reasonably designed to improve the effectiveness of the 
Company’s internal accounting controls and FCPA corporate compliance program as they relate 
to the Company’s compliance with the FCPA and other applicable anti-corruption laws.  The 
Monitor should consult with the Company concerning his or her findings and recommendations 
on an ongoing basis and should consider the Company’s comments and input to the extent the 
Monitor deems appropriate.  The Monitor may also choose to share a draft of his or her report with 
the Company and Commission staff prior to finalizing it.  The Monitor shall provide the report to 
the Board of Directors of the Company and contemporaneously transmit a copy to Commission 
staff. 

 
 7 
14. Within one hundred fifty (150) days after receiving the Monitor’s First Review 
Report, the Company shall adopt and implement all recommendations in the report, provided, 
however, that as to any recommendation that the Company considers unduly burdensome, 
impractical, costly, or inconsistent with applicable law or regulation, the Company need not adopt 
that recommendation at that time, but may submit in writing to the Monitor and the Commission 
staff within sixty (60) days of receiving the report, an alternative policy, procedure, or system 
designed to achieve the same objective or purpose. 
15. In the event the Company and the Monitor are unable to agree on an acceptable 
alternative proposal, the Company shall promptly consult with the Commission staff.  Any 
disputes between the Company and the Monitor with respect to the recommendations shall be 
decided by the Commission staff in its sole discretion.  The Commission staff shall consider the 
Monitor’s recommendation and the Company’s reasons for not adopting the recommendation in 
determining whether the Company has fully complied with its obligations.  Pending such 
determination, the Company shall not be required to implement any contested recommendation(s). 
16. With respect to any recommendation that the Monitor determines cannot 
reasonably be implemented within one hundred and fifty (150) days after receiving the report, the 
Monitor may extend the time period for implementation with prior written approval of the 
Commission staff. 
Second Review 
17. Within one hundred twenty (120) days after the issuance of the First Review 
Report, the Monitor shall submit a written Work Plan for the Second Review to the Company and 
Commission staff.  the Company and Commission staff shall provide any comments concerning 

 
 8 
the Work Plan within thirty (30) days in writing to the Monitor.  Any disputes between the 
Company and the Monitor with respect to the written Work Plan shall be decided by the 
Commission staff in its sole discretion.  Following comments by the Company and Commission 
staff, the Monitor will have fifteen (15) days to submit a Final Second Review Work Plan. 
18. The Second Review shall commence no later than one hundred eighty (180) days 
after the issuance of the First Review Report (unless otherwise agreed by the Company, the 
Monitor, and the Commission staff).  The Monitor shall issue a written Second Review Report 
within one hundred twenty (120) days of commencing the Second Review.  The Second Review 
Report shall set forth the Monitor’s assessment of, and any additional recommendations regarding, 
the Company’s internal accounting controls and FCPA corporate compliance program as they 
relate to the Company’s compliance with the FCPA and other applicable anti-corruption laws; the 
Monitor’s assessment of the implementation by the Company of any recommendations made in 
the First Review Report; and the Monitor’s assessment of the commitment of the Company’s 
Board of Directors and senior management to compliance with anti-corruption laws. 
19. Within one hundred twenty (120) days after receiving the Monitor’s Second 
Review Report, the Company shall adopt and implement all recommendations in the report, 
provided, however, that as to any recommendation that the Company considers unduly 
burdensome, impractical, costly, or inconsistent with applicable law or regulation, the Company 
need not adopt that recommendation at that time, but may submit in writing to the Monitor and the 
Commission staff within thirty (30) days of receiving the report, an alternative policy, procedure, 
or system designed to achieve the same objective or purpose. 

 
 9 
20. In the event the Company and the Monitor are unable to agree on an acceptable 
alternative proposal within thirty (30) days, the Company shall promptly consult with the 
Commission staff.  Any disputes between the Company and the Monitor with respect to the 
recommendations shall be decided by the Commission staff in its sole discretion.  The 
Commission staff shall consider the Monitor’s recommendation and the Company’s reasons for 
not adopting the recommendation in determining whether the Company has fully complied with 
its obligations.  Pending such determination, the Company shall not be required to implement any 
contested recommendation(s). 
Third Review 
21. The Monitor shall commence a Third Review no later than one hundred fifty (150) 
days after the issuance of the Second Review Report (unless otherwise agreed by the Company, the 
Monitor, and the Commission staff).  The monitor shall issue a written Third Review Report within 
one hundred twenty (120) days of commencing the Third Review, setting forth the Monitor’s 
assessment and, if necessary, making recommendations in the same fashion as with the prior 
reviews.   
22. Within one hundred twenty (120) days after receiving the Monitor’s Third Review 
Report, the Company shall adopt and implement all recommendations in the report, provided, 
however, that as to any recommendation that the Company considers unduly burdensome, 
impractical, costly, or inconsistent with applicable law or regulation, the Company need not adopt 
that recommendation at that time, but may submit in writing to the Monitor and the Commission 
staff within thirty (30) days of receiving the report, an alternative policy, procedure, or system 
designed to achieve the same objective or purpose. 

 
 10 
23. In the event the Company and the Monitor are unable to agree on an acceptable 
alternative proposal within thirty (30) days, the Company shall promptly consult with the 
Commission staff.  Any disputes between the Company and the Monitor with respect to the 
recommendations shall be decided by the Commission staff in its sole discretion.  The 
Commission staff shall consider the Monitor’s recommendation and the Company’s reasons for 
not adopting the recommendation in determining whether the Company has fully complied with 
its obligations.  Pending such determination, the Company shall not be required to implement any 
contested recommendation(s). 
Certification 
 
24.  No later than sixty (60) days after implementation of the recommendations in the 
Monitor’s Third Review Report, the Monitor shall certify whether the Company’s compliance 
program, including its policies and procedures, is reasonably designed and implemented to prevent 
and detect violations of the FCPA and is functioning effectively.   Such certification shall be 
supported by a written Final Certification Report that certifies the Company’s compliance with its 
obligations under the Final Judgment, and which shall set forth an assessment of the sustainability 
of the Company’s remediation efforts and may also recommend areas for further follow-up by the 
Company.   
25.  The monitor shall orally notify the Commission staff at least fourteen (14) days prior to 
the issuance of the Final Certification Report whether he or she expects to be able to certify as 
provided herein.  In the event the Monitor is unable to certify within the three year term of the 
monitor period, the following extension provisions shall be in effect. 

 
 11 
Extension of Monitor Period 
26.  If, as informed by the Monitor’s inability to certify that the Company’s compliance 
program, including its policies and procedures, is reasonably designed and implemented to prevent 
and detect violations of the FCPA and is functioning effectively, the Commission staff concludes 
that the Company has not successfully satisfied its obligations under the Monitorship, the Monitor 
Period shall be extended for a reasonable time. 
27. Under such circumstances, the Monitor shall commence a Fourth Review no later 
than sixty (60) days after the Commission staff concludes that the Company has not successfully 
satisfied its compliance obligations under the Final Judgment (unless otherwise agreed by the 
Company, the Monitor, and the Commission staff).  The Monitor shall issue a written Fourth 
Review Report within ninety (90) days of commencing the Fourth Review in the same fashion as 
set forth in Paragraph 13 with respect to the First Review and in accordance with the procedures 
for follow-up reports set forth in Paragraphs 17 to 21.  A determination to terminate the 
Monitorship shall then be made in accordance with Paragraph 24. 
28. If, after completing the Fourth Review the Monitor is unable to certify, the 
Monitorship shall be extended, and the Monitor shall commence a Fifth Review (unless otherwise 
agreed by the Company, the Monitor, and the Commission staff).  The Monitor shall issue a 
written Fifth Review Report within ninety (90) days of commencing the Fifth Review in the same 
fashion as set forth in Paragraph 13 with respect to the First Review and in accordance with the 
procedures for follow-up reports set forth in Paragraphs 17 to 21.  These reviews shall continue 
until the Monitor is able to certify, or unless as otherwise agreed by the Company and 
Commission staff. 

 
 12 
Discovery of Potential or Actual Misconduct 
29. Throughout the Term of the Monitorship, the Monitor shall disclose to the 
Commission staff any credible evidence that corrupt or otherwise suspicious transactions 
occurred, or payments or things of value were offered, promised, made, or authorized by any 
entity or person within the Company, or any entity or person working directly or indirectly for or 
on behalf of the Company, or that related false books and records may have been maintained by 
or on behalf of the Company or that relevant internal accounting controls were circumvented or 
were not reasonably designed or implemented.  The Monitor shall contemporaneously notify the 
Company’s General Counsel, Chief Compliance Officer, or Audit Committee for further action 
unless at the Monitor’s discretion he or she believes disclosure to the Company would be 
inappropriate under the circumstances.  The Monitor shall address in his or her reports the 
appropriateness of the Company’s response to all improper activities, whether previously 
disclosed to the Commission staff or not. 
Certification of Completion  
30. No later than sixty (60) days from date of the completion of the undertakings with 
respect to the Monitorship, the Company shall certify, in writing, compliance with the undertakings 
set forth above.  The certification shall identify the undertakings, provide written evidence of 
compliance in the form of a narrative, and be supported by exhibits sufficient to demonstrate 
compliance.  The Commission staff may make reasonable requests for further evidence of 
compliance, and the Company agrees to provide such evidence. 

 
 13 
Extensions of Time 
 31. Upon request by the Monitor or the Company, the Commission staff may extend 
any procedural time period set forth above for good cause shown. 
Confidentiality of Reports 
32. The reports submitted by the Monitor and the periodic reviews and reports 
submitted by the Company will likely include confidential financial, proprietary, competitive 
business, or commercial information.  Public disclosure of the reports could discourage 
cooperation, impede pending or potential government investigations, or undermine the objective 
of the reporting requirement.  For these reasons, among others, the reports and the contents 
thereof are intended to remain and shall remain non-public, except (i) pursuant to court order, (ii) 
as agreed to by the parties in writing, (iii) to the extent that the Commission determines in its 
sole discretion that disclosure would be in furtherance of the Commission’s discharge of its 
duties and responsibilities, or (iv) as is otherwise required by law. 
Address for All Written Communications and Reports 
 
 33. All reports or other written communications by the Monitor or the Company 
directed to the Commission staff shall be transmitted to Tracy L. Price, Assistant Director, FCPA 
Unit, Division of Enforcement, U.S. Securities and Exchange Commission, 100 F Street NE, 
Washington D.C. 20549.   
 

1 

 

                                                                                                                

UNITED STATES OF AMERICA 

Before the 

SECURITIES AND EXCHANGE COMMISSION 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 79780 / January 12, 2017 

 

ACCOUNTING AND AUDITING ENFORCEMENT 

Release No. 3843 / January 12, 2017 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-17771 

 

 

In the Matter of 

 

Biomet, Inc. 

 

Respondent. 

 

 

 

 

ORDER INSTITUTING CEASE-AND-

DESIST PROCEEDINGS PURSUANT TO 

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 that cease-

and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities 

Exchange Act of 1934 (“Exchange Act”), against Biomet, Inc. (“Biomet” or “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, Respondent admits the Commission’s 

jurisdiction over it and the subject matter of these proceedings, and consents to the entry of this 

Order Instituting Cease-and-Desist Proceedings Pursuant to 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. These proceedings arise from violations of the Foreign Corrupt Practices Act of 

1977 (the “FCPA”) [15 U.S.C. 78dd] by Respondent Biomet, Inc., a global medical device 

company with operations around the world.  From approximately 2008 through 2013, Biomet, 

through its subsidiary and third party customs brokers, made unlawful payments to Mexican 

customs officials to facilitate the importation of Biomet’s unregistered and mislabeled dental 

products into Mexico.  In addition, from 2009 to 2013, Biomet improperly recorded transactions 

with a known prohibited distributor in Brazil as transactions with another distributor.  Biomet had 

prohibited the use of the distributor after determining the distributor made improper payments to 

public doctors in Brazil from 2000 to August 2008 to obtain sales of Biomet products, which was 

the subject of Biomet’s 2012 settlement with the Commission and criminal authorities for FCPA 

violations.  Biomet could not account for the prohibited distributor’s use of certain funds nor 

determine if the prohibited distributor had continued the same improper conduct.  Biomet failed to 

appropriately record the transactions in Mexico and Brazil in its books and records.  Biomet also 

failed to devise and maintain a sufficient system of internal accounting controls.     

Respondent  

 

2. Biomet, Inc. is a medical device company headquartered in Warsaw, Indiana that 

sells medical device and dental products.  Prior to 2008, Biomet’s common stock was registered 

with the Commission pursuant to Section 12(b) of the Exchange Act.  In September 2007, Biomet 

was acquired by a group of private equity funds and went private.  Biomet subsequently filed a 

Form S-1 that went effective in May 2008 and was therefore required pursuant to Rule 15(d) to file 

periodic reports with the Commission.   

 

3. In a March 2012 settlement with the Commission, Biomet consented to a 

permanent injunction against future violations of Sections 30A, 13(b)(2)(A), and 13(b)(2)(B) of the 

Exchange Act, as well as the appointment of an independent compliance monitor for a period of 

three years, for FCPA violations in multiple countries. 

 

4. In June 2015, Biomet was acquired by Zimmer Holdings, Inc. (“Zimmer”), and the 

combined companies were renamed Zimmer Biomet Holdings, Inc.  The new company remained 

headquartered in Warsaw, Indiana.  Zimmer Biomet began trading on the New York Stock 

Exchange and the SIX Swiss Exchange under the ticker symbol “ZBH” on June 29, 2015.  Zimmer 

                                                 
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 

Biomet operates in more than 100 countries, has approximately 17,000 employees, and in fiscal 

year 2015, reported revenue of $ 6 billion.   

 

Relevant Entities 

5. Biomet 3i LLC (“Biomet 3i”) is a wholly owned subsidiary of Biomet, Inc., 

located in Palm Beach Gardens, Florida, that sold dental implants in various countries, including 

Brazil and Mexico.  Biomet 3i’s books and records were consolidated into the books and records of 

Biomet. 

 

6. Biomet 3i Mexico (“3i Mexico”) is a Mexico City, Mexico based business 

operation of Biomet 3i, a U.S. subsidiary of Biomet, Inc.  Biomet 3i conducted all of its sales in 

Mexico through 3i Mexico.  3i Mexico’s books and records were ultimately consolidated into 

Biomet’s books and records. 

 

7. Biomet International Corporation (“Biomet International”) is a Delaware 

corporation and a wholly-owned subsidiary of Biomet.  Biomet conducts sales of Biomet products 

in Brazil through Biomet International.  Biomet International’s books and records are consolidated 

into Biomet’s books and records. 

 

8. Mexican Customs Broker is a private company registered in Mexico that acted as 

3i Mexico’s primary customs broker from April 2010 to October 2013.  3i Mexico did not have a 

written contract or fee schedule with Mexican Customs Broker during this time. 

 

9. Texas Customs Broker is a private company based in Mission, Texas.  Texas 

Customs Broker served as 3i Mexico’s customs broker until mid-2009.  Texas Customs Broker 

was not a licensed customs broker, and 3i Mexico did not have a written contract or fee schedule 

with the company. 

 

10. Prohibited Brazilian Distributor was the individual owner of a Brazilian 

company that served as Biomet’s exclusive authorized distributor for reconstructive products in 

Brazil until 2008, when Biomet terminated the relationship due to prior FCPA violations.   

 

Prior Commission Action 

 

11. In March 2012, the SEC filed a settled injunctive action against Biomet for 

violations of the anti-bribery, books and records, and internal controls provisions of the federal 

securities laws.  The complaint alleged that, from 2000 through August 2008, Biomet, through four 

subsidiaries, paid bribes to public doctors employed by public hospitals and agencies in Argentina, 

Brazil, and China.  One of the largest schemes involved Biomet’s sales of medical devices in 

Brazil through its U.S. subsidiary, Biomet International.  Biomet International employees engaged 

in a scheme in which its Brazilian distributor, through his company, paid bribes to doctors 

employed by state-owned hospitals in the form of “commissions” of 10-20% of the value of 

medical devices purchased by the doctors, since as early as 2001.  As part of its settlement with the 

SEC, Biomet agreed to terminate its relationship with the distributor (“Prohibited Brazilian 



 

 4 

Distributor”).  In 2009, Biomet re-entered the Brazilian market and hired new Brazilian distributors 

to sell its medical implants.  Biomet subsequently notified the Commission staff that sales of 

Biomet products into Brazil would be done by these new authorized distributors.   

 

12. Biomet paid $5.5 million in disgorgement and prejudgment interest, and was 

ordered to retain an independent compliance monitor to review its compliance program.  At the 

same time, Biomet entered into a deferred prosecution agreement (“DPA”) with the Department of 

Justice that imposed a criminal fine of $17,280,000 and the appointment of a monitor. 

 

13. After the settlement and pursuant to the monitor’s recommendations, Biomet took 

steps to enhance its compliance program, including conducting trainings, hiring additional 

compliance resources, and implementing new policies and controls.  Biomet reported its remedial 

steps to Commission staff and the monitor on a periodic basis.  In 2013, Biomet reported to the 

Commission staff and the monitor suspected instances of continued anti-bribery violations, 

including conduct in Brazil and Mexico.  Biomet retained outside counsel to conduct an 

investigation.  Subsequently, in June 2015, Biomet was acquired by Zimmer, and Zimmer began a 

process to fully integrate the legacy Biomet entity into a newly combined compliance program.  

Despite extending the monitorship by one year, the monitor ultimately was unable to certify that 

the legacy Biomet entity had a fully operational and effective compliance program as a result of the 

acquisition and the recurring compliance issues in Brazil and Mexico.  The monitorship terminated 

in March 2016.     

 

Biomet Continues Use of Prohibited Brazilian Distributor  

14. Despite telling the government that it had terminated its relationship with 

Prohibited Brazilian Distributor in 2008, Biomet continued to sell goods into Brazil through 

Prohibited Brazilian Distributor through 2013.  Biomet International recorded the transactions with 

Prohibited Brazilian Distributor on its books and records as if they were transactions with their 

authorized distributor.  Biomet did not take any action to stop the conduct until it received a 

whistleblower complaint at the end of 2013, and initiated an internal investigation. 

 

15. As early as 2009, Biomet conducted an internal audit of its Brazilian distributors 

that identified a relationship between its authorized distributor and Prohibited Brazilian 

Distributor’s company.  The draft audit report recommended that the authorized distributor needed 

to be fully separated from Prohibited Brazilian Distributor’s company.  However, the 

recommendation and references to Prohibited Brazilian Distributor’s company were removed from 

the final report by a member of Biomet’s legal team and the issue was not tracked for follow up by 

anyone in Biomet’s legal, compliance, or internal audit departments, thereby allowing the 

relationship to continue for several more years.  

 

16. By at least April 2010, Biomet became aware that the owner of one of Biomet’s 

authorized distributors had given over control of the company to Prohibited Brazilian Distributor.2  

                                                 
2  At the time that Biomet entered into distribution agreements with the new Brazilian distributors, Biomet 

was aware that each of these new distributors was owned and operated by former partners of Prohibited Brazilian 



 

 5 

A Biomet employee even described the relationship in documents as the “[authorized distributor] = 

[Prohibited Brazilian Distributor]”.   Further, in June 2010, Prohibited Brazilian Distributor entered 

into a consulting agreement with the authorized distributor.  The Prohibited Brazilian Distributor’s 

compensation under the agreement was tied to increases in Biomet product sales.  Certain Biomet 

senior employees were aware of this consulting relationship as early as June 2010 and failed to 

take steps to stop the relationship. 

 

17. Thereafter, in July 2010, the authorized distributor informed Biomet that it faced 

importation restrictions in Brazil, but suggested a means to work around the restrictions by 

arranging for Prohibited Brazilian Distributor, which continued to hold Biomet product 

registrations, to directly import Biomet products on behalf of the authorized distributor.  Biomet 

approved the proposed importation arrangement.  With Biomet’s knowledge and consent, the 

authorized distributor placed product orders with Biomet and provided cash to Prohibited Brazilian 

Distributor to cover the customs, duties, and product costs.  Prohibited Brazilian Distributor used a 

portion of the cash to pay customs and transferred the rest to his personal bank account.  Biomet 

then received wire transfers from Prohibited Brazilian Distributor’s personal bank account relating 

to the shipments, but credited the payments to invoices issued to the authorized distributor. 

 

18. In addition, between July 2012 and September 2013, the authorized distributor paid 

Prohibited Brazilian Distributor and/or his company approximately $3 million in product 

purchases, $2 million for which Biomet could not determine the purpose, and $30,000 for an 

apartment used by Prohibited Brazilian Distributor in Sao Paulo.  Furthermore, despite knowing of 

the prohibition against further dealings with Prohibited Brazilian Distributor, certain Biomet 

employees continued to meet with Prohibited Brazilian Distributor for business purposes, and 

allowed Prohibited Brazilian Distributor to attend several Biomet sales events between 2010 and 

2013.   

 

19. Despite clear knowledge that Prohibited Brazilian Distributor was acting as its 

distributor since 2009, Biomet recorded the business transactions as if they were transactions with 

their authorized distributor.  From July 2009 to September 2013, Biomet obtained over $3,168,000 

in profits from the transactions involving the Prohibited Brazilian Distributor.   

 

Sale of Unregistered and Mislabeled Products into Mexico 

20. Until mid-2009, both 3i Mexico and another Biomet subsidiary, Biomet Mexico, 

imported products into Mexico via Laredo, Texas, using Texas Customs Broker.  Texas Customs 

Broker was an unlicensed customs broker and Biomet did not have a written contract or fee 

schedule with the broker.  In January 2009, Biomet 3i employees received emails indicating that 3i 

Mexico planned to import unregistered product into Mexico through Laredo.  One such email from 

the head of 3i Mexico, a Mexican national based in Mexico, stated “In the airport of Mexico, 

                                                                                                                                                             
Distributor.  Biomet failed to appropriately assess the risks posed by the connection between Prohibited Brazilian 

Distributor and his former partners and did not take steps to monitor changes in the ownership structure of the new 

distributors.  



 

 6 

customs are stricter and the importing is more complicated.  At the Texas border, since it is a land 

border, it is less strict and they do not request all the documents.”   

21. Subsequently, Biomet investigated the Texas Customs Broker as part of a broader 

compliance assessment to be performed by an outside auditing firm.  The auditor’s report noted 

that “Biomet Mexico was found to still be using a certain customs consultant ([Texas Customs 

Broker]) for expediting Biomet products through the Mexico/US border that was previously 

determined by Biomet Corporate to be of higher risk.”  The auditor’s report also noted that Biomet 

lacked “due diligence procedures regarding distributors and custom agents/consultants and a 

formal process related to their selection,” causing internal controls risks.  The report recommended 

that Biomet establish formal policies and procedures regarding vendor due diligence. 

 

22. Biomet Mexico senior management were aware that Texas Customs Broker was 

able to “import limited quantities of certain instruments without obtaining a Mexican product 

license…” and that the Texas Customs Broker would simply “physically cross the border in [his] 

own vehicles with Biomet’s product.”  The Texas Customs Broker was essentially smuggling the 

goods over the border. 

 

23. Based on the findings in the auditor’s report, which alerted Biomet to significant 

red flags about the ongoing use of an unlicensed customs broker circumventing customs 

requirements for the purpose of importing unregistered products, Biomet instructed Biomet 

Mexico and 3i Mexico to cease working with Texas Customs Broker.   

 

24. In April 2010, to replace Texas Customs Broker, 3i Mexico hired Mexican 

Customs Broker as its primary customs broker, but again did not enter into a written contract or fee 

schedule.  Mexican Customs Broker served as 3i Mexico’s primary customs broker through 

October 2013.   

 

25. In early 2010, 3i Mexico began experiencing problems importing product at the 

Mexico City International Airport because of missing registrations and incorrect labels on 

products.  Biomet 3i Mexico senior management suggested shipping such products through 

Laredo, Texas instead.  Senior Biomet and Biomet 3i personnel across multiple departments, 

including legal, regulatory, compliance, and finance, were aware of the problems importing goods 

through Mexico City.  Senior Biomet 3i employees approved a proposed solution to ship through 

Laredo because of its more lax customs procedures.  Biomet 3i Mexico began working with 

Mexican Customs Broker to import the unregistered and mislabeled products from Biomet 3i’s 

Palm Beach Gardens location into Mexico through Laredo, Texas.  Despite subsequently 

confirming in July 2012 with its regulatory consultant that it was illegal both to import into Mexico 

and sell within Mexico unregistered product, Biomet 3i  allowed certain shipments to continue 

after July 2012, as well as permitted the sale of unregistered product that had already entered 

Mexico. 

 



 

 7 

26. To address these importation issues, with the knowledge of the head of 3i Mexico, 

Mexican Customs Broker divided shipment items based on whether they had valid registrations 

and proper labeling.  Mexican Customs Broker imported the registered products through the 

Mexico City airport, while hiring sub-agents to smuggle the unregistered and mislabeled product 

through Laredo by paying bribes to Mexican customs officials at the border.  Once the divided 

items entered Mexico, Mexican Customs Broker would recombine them and deliver the complete 

shipment to 3i Mexico. 

 

27. Mexican Customs Broker through its sub-agents made improper payments to 

Mexican customs officials when necessary to import the sub-agent shipments with the knowledge 

and approval of the head of 3i Mexico.  To facilitate these payments, Mexican Customs Broker 

provided separate invoices to Biomet 3i Mexico for services rendered by Mexican Customs Broker 

and by its sub-agents.  A Biomet 3i Mexico employee based in Mexico omitted references to the 

sub-agents when entering the payments into Biomet’s accounting system, and recorded the 

payments to the sub-agents as though they were payments to Mexican Customs Broker. 

 

28. From approximately April 2010 to September 2013, Biomet paid Mexican Customs 

Broker approximately $549,000 and its sub-agents $981,000.  The payments to Mexican Customs 

Broker’s sub-agents were unusually large and lacked supporting documentation, containing only 

one-line invoices for unspecified “Professional Services” or “Consulting and Logistics.”  Mexican 

Customs Broker’s invoices, which were not supported by any fee schedule agreed upon between 3i 

Mexico and Mexican Customs Broker or any other details, included simply line items such as 

“Servicio Especial” or “Servicio Extraordinario” (Special or Extraordinary Service), “Cruce de 

Puente” (Bridge Crossing Fee), or “Cuenta Americana,” (American Account).  These unsupported 

and/or improper charges from Mexican Customs Broker and its sub-agents were improperly 

recorded under a Costo de Fletes (Freight Cost) account.   

 

29. From 2008 to 2013, Biomet obtained $2,652,100 in profits from the transactions 

involved in the Mexico scheme. 

 

Anti-Bribery Violations 

 

30. Biomet subsidiary 3i Mexico engaged Mexican Customs Broker and certain sub-

agents to pay bribes to Mexican customs officials for the purpose of circumventing Mexican 

customs laws regarding importing unregistered and improperly labeled products into Mexico.  

Biomet the parent saw numerous red flags indicating that the Mexican subsidiary’s customs agents 

were using bribes to resolve the known Mexican customs issues.  Biomet had already instructed 

Biomet Mexico and 3i Mexico to terminate a relationship with Texas Customs Broker after 

numerous red flags were identified indicating Texas Customs Broker was likely smuggling 

unregistered products over the border.  3i Mexico subsequently failed to conduct adequate due 

diligence in the hiring of Mexican Customs Broker and its sub-agents as a replacement, or to 

require a written contract or fee schedule.  Further, Biomet employees across multiple levels and 

departments were aware of importation issues arising in Mexico and failed to question how 

Mexican Customs Broker was managing to overcome such issues while other Biomet employees 



 

 8 

based in Mexico knew that bribes were being paid at the border.  Biomet was on notice of 

substantial compliance risks based in part on the outside auditor report since as early as 2008, and 

failed to take steps to detect and prevent the ongoing bribery.  As a result of the bribery of Mexican 

customs officials, Biomet violated Section 30A of the Exchange Act. 

 

Failure to Maintain Accurate Books and Records 

 

31. In Brazil, over the period July 2009 to September 2013, Biomet improperly 

recorded in its books and records payments to Prohibited Brazilian Distributor as payments to 

another authorized distributor.  In Mexico, a Biomet subsidiary engaged two agents, one who was 

unlicensed,  to smuggle goods across the border.  One of the agents paid bribes to Mexican 

customs officials.  Biomet improperly recorded payments to both agents between 2010 and 2013 in 

excess of $1.5 million, including $981,000 in payments to sub-agents that was actively concealed 

in Biomet’s books and records.  The payments were recorded as freight cost and as other legitimate 

costs, which did not reflect the true nature of those payments.  Biomet violated Section 13(b)(2)(A) 

by improperly recording the transactions and payments in Brazil and Mexico in its accounting 

books and records.   

 

Failure to Maintain Sufficient Internal Accounting Controls 

 

32. Biomet failed to implement internal accounting controls sufficient to detect or 

prevent bribery and to ensure the accuracy of its books and records.  Biomet’s ongoing business 

ties to Prohibited Brazilian Distributor were known to Biomet employees as early as December 

2009 and Biomet failed to take appropriate steps to stop the continued prohibited relationship.  

Biomet improperly recorded its business transactions with Prohibited Brazilian Distributor as 

transactions with its authorized distributor.  Biomet violated Section 13(b)(2)(B) of the Exchange 

Act by failing to have internal controls in place to detect and prevent Biomet’s improper recording 

of transactions with the Prohibited Brazilian Distributor.  

 

 33. Biomet further failed to devise and maintain internal accounting controls to prevent 

and detect 3i Mexico’s payments to Texas Customs Broker and Mexican Customs Broker  to get 

product without valid registrations or proper labeling into Mexico, including improper payments to 

Mexican customs officials made by Mexican Customs Broker.  Biomet directed 3i Mexico to 

terminate its arrangement with Texas Customs Broker and to hire a new broker.  However, 3i 

Mexico failed to conduct due diligence on Mexican Customs Broker and failed to get a written 

contract or fee schedule.  Biomet failed to address the numerous red flags that bribery was 

occurring to import its goods into Mexico.  Biomet’s internal accounting controls did not prevent 

and detect the improper payments totaling approximately $981,000 between 2010 and 2013.    

 

Legal Standards and Violations 

34. As a result of the conduct described above, Biomet violated Section 30A of the 

Exchange Act, which makes it unlawful for an issuer with securities registered under Section 12 of 

the Exchange Act or which is required to file reports under Section 15(d) of the Exchange Act, or 

any employee or agent acting on its behalf, to make use of the mails or any means or 



 

 9 

instrumentality of interstate commerce corruptly in furtherance of an effort to pay or offer to pay 

anything of value to foreign officials for the purpose of influencing their official decision-making, 

in order to assist in obtaining or retaining business.   

35. Further, as a result of the conduct described above, Biomet violated Section 

13(b)(2)(A) of the Exchange Act, which requires issuers to make and keep books, records, and 

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

of the assets of the issuer.  

 36. In addition, as a result of the conduct described above, Biomet violated Section 

13(b)(2)(B) of the Exchange Act, which requires issuers to devise and maintain a system of 

internal accounting controls sufficient to provide reasonable assurances that (i) transactions are 

executed in accordance with management’s general or specific authorization; (ii) transactions are 

recorded as necessary (I) to permit preparation of financial statements in conformity with generally 

accepted accounting principles or any other criteria applicable to such statements, and (II) to 

maintain accountability for assets; (iii) access to assets is permitted only in accordance with 

management’s general or specific authorization; and (iv) the recorded accountability for assets is 

compared with the existing assets at reasonable intervals and appropriate action is taken with respect 

to any differences.   

 

Remedial Actions and Undertakings  

 

 37. In determining to accept the Offer, the Commission considered Respondent’s 

cooperation and remedial acts.   

 

 38. Respondent undertakes to engage an Independent Compliance Monitor pursuant to 

the provisions set forth in Attachment A of the Order.  

  

 39. Respondent undertakes to require the Independent Compliance Monitor to enter 

into an agreement that provides that for the period of engagement and for a period of two years 

from completion of the engagement, the Independent Compliance Monitor shall not enter into any 

employment, consultant, attorney-client, auditing or other professional relationship with 

Respondent, or any of its present or former affiliates, directors, officers, employees, or agents 

acting in their capacity.  The agreement will also provide that the Independent Compliance 

Monitor will require that any firm with which he/she is affiliated or of which he/she is a member, 

and any person engaged to assist the Independent Compliance Monitor in performance of his/her 

duties under this Order shall not, without prior written consent of the Division of Enforcement, 

enter into any employment, consultant, attorney-client, auditing or other professional relationship 

with Respondent, or any of its present or former affiliates, directors, officers, employees, or agents 

acting in their capacity as such for the period of the engagement and for a period of two years after 

the engagement. 

 

 40. Certify, in writing, compliance with the undertaking(s) set forth above.  The 

certification shall identify the undertaking(s), provide written evidence of compliance in the form 

of a narrative, and be supported by exhibits sufficient to demonstrate compliance.  The 



 

 10 

Commission staff may make reasonable requests for further evidence of compliance, and 

Respondent agrees to provide such evidence.  The certification and supporting material shall be 

submitted to Kara Novaco Brockmeyer, FCPA Unit Chief, Division of Enforcement, U.S. 

Securities and Exchange Commission, 100 F Street, N.E., Mail Stop 5631, Washington, D.C. 

20549, with a copy to the Office of Chief Counsel of the Enforcement Division, no later than sixty 

(60) days from the date of the completion of the undertakings.    

 

 

 41. Respondent undertakes to do the following:  in connection with this action and any 

related judicial or administrative proceeding or investigation commenced by the Commission or to 

which the Commission is a party, Respondent (i) agrees to appear and be interviewed by 

Commission staff at such times and places as the staff requests upon reasonable notice; (ii) will 

accept service by mail or facsimile transmission of notices or subpoenas issued by the Commission 

for documents or testimony at depositions, hearings, or trials, or in connection with any related 

investigation by Commission staff; (iii) appoints Respondent's undersigned attorney as agent to 

receive service of such notices and subpoenas; (iv) with respect to such notices and subpoenas, 

waives the territorial limits on service contained in Rule 45 of the Federal Rules of Civil Procedure 

and any applicable local rules, provided that the party requesting the testimony reimburses 

Respondent's travel, lodging, and subsistence expenses at the then-prevailing U.S. Government per 

diem rates; and (v) consents to personal jurisdiction over Respondent in any United States District 

Court for purposes of enforcing any such subpoena. 

  

Deferred Prosecution Agreement 

 

 42. Zimmer Biomet will enter into a deferred prosecution agreement with the 

Department of Justice that acknowledges responsibility for criminal conduct relating to the 

findings in the Order.  Specifically, Zimmer Biomet acknowledges responsibility for Biomet’s 

violations of the internal controls provisions of the Foreign Corrupt Practices Act of 1977 

(“FCPA”), as amended, 15 U.S.C. §§ 78m(b)(2)(B), 78m(b)(5), and 78ff(a).  Further, Jerds 

Luxembourg Holding, S.AR.L., the direct parent company of Biomet 3i Mexico, will enter into a 

guilty plea for causing violations of the FCPA’s books and records provisions, 15 U.S.C. §§ 

78m(b)(2)(A).  Zimmer Biomet has agreed to pay a criminal fine of $17,460,300 in connection 

with the deferred prosecution agreement.  

 

IV. 

 

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

agreed to in Respondent Biomet’s Offer. 

 

 Accordingly, it is hereby ORDERED that: 

 

 A. Pursuant to Section 21C of the Exchange Act, Respondent Biomet cease and desist 

from committing or causing any violations and any future violations of Sections 13(b)(2)(A), 

13(b)(2)(B) and 30A of the Exchange Act [15 U.S.C. §§ 78m(b)(2)(A), 78m(b)(2)(B), and 78dd-1]. 



 

 11 

 

 B. Respondent will comply with its Undertakings as enumerated in paragraphs 38 to 41 

above.  

 

 C. Respondent shall, within fourteen days of the entry of this Order, pay disgorgement 

of $5,820,100, prejudgment interest of $702,705, and a civil penalty of $6,500,000, for total 

payment of $13,022,805 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 payment of 

disgorgement and prejudgment interest is not made by the date the payment is required by this 

Order, additional interest shall accrue pursuant to SEC Rule of Practice 600, and if payment of the 

civil penalty is not made by the date the payment is required by this Order, additional interest shall 

accrue pursuant to 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 

Biomet 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 Tracy L. Price, Assistant Director, 

Division of Enforcement, Securities and Exchange Commission, 100 F St., NE, Washington, DC 

20549-5631. 

 

 

 By the Commission. 

 

 

 

       Brent J. Fields 

       Secretary 



1 

 

Attachment A 

Independent Compliance Monitor 

Retention of Monitor and Term of Engagement 

 1. Zimmer Biomet (“Company”) shall engage an independent compliance monitor 

(the “Monitor”) not unacceptable to the staff of the Commission within sixty (60) calendar days of 

the issuance of the Order.  The Monitor shall have, at a minimum, the following qualifications: (i) 

demonstrated expertise with respect to the FCPA and other applicable anti-corruption laws, 

including experience counseling on FCPA issues; (ii) experience designing or reviewing corporate 

compliance policies, procedures, and internal accounting controls, including FCPA and anti-

corruption policies and procedures; (iii) the ability to access and deploy resources as necessary to 

discharge the Monitor’s duties; and (iv) sufficient independence from the Company to ensure 

effective and impartial performance of the Monitor’s duties.  The Commission staff may extend the 

Company’s time period to retain the Monitor, in its sole discretion.  If the Monitor resigns or is 

otherwise unable to fulfill the obligations herein, the Company shall within forty-five (45) days 

retain a successor Monitor that has the same minimum qualifications as the original monitor and 

that is not unacceptable to the Commission staff.   

 2. The Company shall retain the Monitor for a period of not less than thirty-six (36) 

months, unless the Commission staff finds, in its sole discretion, that there exists a change in 

circumstances sufficient to eliminate the need for the Monitor, in which case the Monitorship may 

be terminated early (the “Term of the Monitorship”).  The term of the Monitorship can be extended 

as set forth in Paragraph 26, below.  The Company shall provide the Commission staff with a copy 



 

 2 

of the agreement detailing the scope of the Monitor’s responsibilities within thirty (30) days after 

the Monitor is engaged.  

 3. During the Term of the Monitorship and for a period of two years from the 

conclusion of the Monitorship, neither the Company nor any of its then-current or former affiliates, 

subsidiaries, directors, officers, employees, or agents acting in their capacity as such shall enter 

into, or discuss the possibility of, any employment, consultant, attorney-client, auditing, or other 

professional relationship with the Monitor.   

Company’s Obligations 

 4. The Company shall cooperate fully with the Monitor and provide the Monitor with 

access to all non-privileged information, documents, books, records, facilities, and personnel as 

reasonably requested by the Monitor; such access shall be provided consistent with the Company’s 

and the Monitor’s obligations under applicable local laws and regulations, including but not limited 

to, applicable data privacy and national security laws and regulations.  The Company shall use its 

best efforts, to the extent reasonably requested, to provide the Monitor with access to the 

Company’s former employees, third party vendors, agents, and consultants.  The Company does 

not intend to waive the protection of the attorney work product doctrine, attorney-client privilege, 

or any other privilege applicable as to third parties. 

 5. The parties agree that no attorney-client relationship shall be formed between the 

Company and the Monitor.  In the event that the Company seeks to withhold from the Monitor 

access to information, documents, books, records, facilities, current or former personnel of the 

Company, its third-party vendors, agents, or consultants that may be subject to a claim of attorney-

client privilege or to the attorney work-product doctrine, or where the Company reasonably 



 

 3 

believes production would otherwise be inconsistent with the applicable law, the Company shall 

work cooperatively with the Monitor to resolve the matter to the satisfaction of the Monitor.  If, 

during the Term of the Monitorship, the Monitor believes that the Company is unreasonably 

withholding access on the basis of a claim of attorney-client privilege, attorney work-product 

doctrine, or other asserted applicable law, the Monitor shall notify the Commission staff. 

 6. Upon entry of this Order and during the Term of the Monitorship, should the 

Company learn of credible evidence or allegations of corrupt payments, false books, records, or 

accounts, or the failure to implement adequate internal accounting controls, the Company shall 

promptly report such evidence or allegations to the Commission staff.  Any disclosure by the 

Company to the Monitor concerning potential corrupt payments, false books and records, or 

internal accounting control issues shall not relieve the Company of any otherwise applicable 

obligation to truthfully disclose such matters to the Commission staff.   

Monitor’s Mandate 

 7. The Monitor shall review and evaluate the effectiveness of the Company’s policies, 

procedures, practices, internal accounting controls, recordkeeping, and financial reporting 

(collectively, “Policies and Procedures”), with a focus on the Company’s legacy Biomet operations 

as integrated into Zimmer Biomet, as they relate to the Company’s current and ongoing 

compliance with the anti-bribery, books and records, and internal accounting controls provisions of 

the FCPA and other applicable anti-corruption laws (collectively, “Anti-corruption Laws”), and 

make recommendations reasonably designed to improve the effectiveness of the Company’s 

internal accounting controls and FCPA corporate compliance program (the “Mandate”).  This 

Mandate shall include an assessment of the Board of Directors’ and senior management’s 



 

 4 

commitment to, and effective implementation of, the FCPA corporate compliance program.  In 

carrying out the Mandate, to the extent appropriate under the circumstances, the Monitor may 

coordinate with the Company personnel, including in-house counsel, compliance personnel, and 

internal auditors.   To the extent the Monitor deems appropriate, it may rely on the Company’s 

processes, and on sampling and testing methodologies.  The Monitor is not expected to conduct a 

comprehensive review of all business lines, all business activities, and all markets.  Any disputes 

between the Company and the Monitor with respect to the Work Plan shall be decided by the 

Commission staff in its sole discretion. 

 8.   During the term of the Monitorship, the Monitor shall conduct three reviews (First 

Review, Second Review, and Third Review), issue a report following each review (First Review 

Report, Second Review Report, and Third Review Report), and issue a Final Certification Report, 

as described below.  The Monitor’s Work Plan for the First Review shall include such steps as are 

reasonably necessary to conduct an effective First Review.  It is not intended that the Monitor will 

conduct its own inquiry into historical events.  In developing each Work Plan and in carrying out 

the reviews pursuant to such plans, the Monitor is encouraged to coordinate with the Company’s 

personnel, including auditors and compliance personnel. 

First Review and Report 

 9. The Monitor shall commence the First Review no later than one hundred twenty 

(120) calendar days from the date of the engagement of the Monitor (unless otherwise agreed by 

the Company, the Monitor, and the Commission staff).   Promptly upon being retained, the 

Monitor shall prepare a written Work Plan, which shall be submitted to the Company and the 

Commission staff for comment no later than sixty (60) days after being retained. 



 

 5 

10. In order to conduct an effective First Review and to understand fully any existing 

deficiencies in the Company’s internal accounting controls and FCPA corporate compliance 

program, the Monitor’s Work Plan shall include such steps as are reasonably necessary to 

understand the Company’s business and its global anti-corruption risks.  The steps shall include: 

(a) inspection of relevant documents, including the internal accounting 

controls, recordkeeping, and financial reporting policies and procedures as 

they relate to the Company’s compliance with the books and records, 

internal accounting controls, and anti-bribery provisions of the FCPA and 

other applicable anti-corruption laws; 

(b) onsite observation of selected systems and procedures comprising the 

Company’s FCPA corporate compliance program, including anti-

corruption compliance procedures, internal accounting controls, 

recordkeeping, due diligence, and internal audit procedures, including at 

sample sites; 

(c) meetings with, and interviews of, as relevant, the Company employees, 

officers, directors, and, where appropriate and feasible, its third-party 

vendors, agents, or consultants and other persons at mutually convenient 

times and places; and 

(d) risk-based analyses, studies, and testing of the Company’s FCPA 

corporate compliance program. 

11. The Monitor may take steps as reasonably necessary to develop an understanding 

of the facts and circumstances surrounding prior FCPA violations that gave rise to this action 



 

 6 

or violations of other applicable anti-corruption laws, but shall not conduct his or her own 

inquiry into those historical events. 

12. After receiving the First Review Work Plan, the Company and Commission staff 

shall provide any comments concerning the First Review Work Plan within thirty (30) days to the 

Monitor.  Any disputes between the Company and the Monitor with respect to the First Review 

Work Plan shall be decided by the Commission staff in its sole discretion.  Following comments 

by the Company and Commission staff, the Monitor will have fifteen (15) days to submit a Final 

First Review Work Plan. 

13. The First Review shall commence no later than one hundred twenty (120) days 

from the date of the engagement of the Monitor (unless otherwise agreed by the Company, the 

Monitor, and the Commission staff).  The Monitor shall issue a written report within one hundred 

fifty (150) days of commencing the First Review, setting forth the Monitor’s assessment and, if 

necessary, making recommendations reasonably designed to improve the effectiveness of the 

Company’s internal accounting controls and FCPA corporate compliance program as they relate 

to the Company’s compliance with the FCPA and other applicable anti-corruption laws.  The 

Monitor should consult with the Company concerning his or her findings and recommendations 

on an ongoing basis and should consider the Company’s comments and input to the extent the 

Monitor deems appropriate.  The Monitor may also choose to share a draft of his or her report with 

the Company and Commission staff prior to finalizing it.  The Monitor shall provide the report to 

the Board of Directors of the Company and contemporaneously transmit a copy to Commission 

staff. 



 

 7 

14. Within one hundred fifty (150) days after receiving the Monitor’s First Review 

Report, the Company shall adopt and implement all recommendations in the report, provided, 

however, that as to any recommendation that the Company considers unduly burdensome, 

impractical, costly, or inconsistent with applicable law or regulation, the Company need not adopt 

that recommendation at that time, but may submit in writing to the Monitor and the Commission 

staff within sixty (60) days of receiving the report, an alternative policy, procedure, or system 

designed to achieve the same objective or purpose. 

15. In the event the Company and the Monitor are unable to agree on an acceptable 

alternative proposal, the Company shall promptly consult with the Commission staff.  Any 

disputes between the Company and the Monitor with respect to the recommendations shall be 

decided by the Commission staff in its sole discretion.  The Commission staff shall consider the 

Monitor’s recommendation and the Company’s reasons for not adopting the recommendation in 

determining whether the Company has fully complied with its obligations.  Pending such 

determination, the Company shall not be required to implement any contested recommendation(s). 

16. With respect to any recommendation that the Monitor determines cannot 

reasonably be implemented within one hundred and fifty (150) days after receiving the report, the 

Monitor may extend the time period for implementation with prior written approval of the 

Commission staff. 

Second Review 

17. Within one hundred twenty (120) days after the issuance of the First Review 

Report, the Monitor shall submit a written Work Plan for the Second Review to the Company and 

Commission staff.  the Company and Commission staff shall provide any comments concerning 



 

 8 

the Work Plan within thirty (30) days in writing to the Monitor.  Any disputes between the 

Company and the Monitor with respect to the written Work Plan shall be decided by the 

Commission staff in its sole discretion.  Following comments by the Company and Commission 

staff, the Monitor will have fifteen (15) days to submit a Final Second Review Work Plan. 

18. The Second Review shall commence no later than one hundred eighty (180) days 

after the issuance of the First Review Report (unless otherwise agreed by the Company, the 

Monitor, and the Commission staff).  The Monitor shall issue a written Second Review Report 

within one hundred twenty (120) days of commencing the Second Review.  The Second Review 

Report shall set forth the Monitor’s assessment of, and any additional recommendations regarding, 

the Company’s internal accounting controls and FCPA corporate compliance program as they 

relate to the Company’s compliance with the FCPA and other applicable anti-corruption laws; the 

Monitor’s assessment of the implementation by the Company of any recommendations made in 

the First Review Report; and the Monitor’s assessment of the commitment of the Company’s 

Board of Directors and senior management to compliance with anti-corruption laws. 

19. Within one hundred twenty (120) days after receiving the Monitor’s Second 

Review Report, the Company shall adopt and implement all recommendations in the report, 

provided, however, that as to any recommendation that the Company considers unduly 

burdensome, impractical, costly, or inconsistent with applicable law or regulation, the Company 

need not adopt that recommendation at that time, but may submit in writing to the Monitor and the 

Commission staff within thirty (30) days of receiving the report, an alternative policy, procedure, 

or system designed to achieve the same objective or purpose. 



 

 9 

20. In the event the Company and the Monitor are unable to agree on an acceptable 

alternative proposal within thirty (30) days, the Company shall promptly consult with the 

Commission staff.  Any disputes between the Company and the Monitor with respect to the 

recommendations shall be decided by the Commission staff in its sole discretion.  The 

Commission staff shall consider the Monitor’s recommendation and the Company’s reasons for 

not adopting the recommendation in determining whether the Company has fully complied with 

its obligations.  Pending such determination, the Company shall not be required to implement any 

contested recommendation(s). 

Third Review 

21. The Monitor shall commence a Third Review no later than one hundred fifty (150) 

days after the issuance of the Second Review Report (unless otherwise agreed by the Company, the 

Monitor, and the Commission staff).  The monitor shall issue a written Third Review Report within 

one hundred twenty (120) days of commencing the Third Review, setting forth the Monitor’s 

assessment and, if necessary, making recommendations in the same fashion as with the prior 

reviews.   

22. Within one hundred twenty (120) days after receiving the Monitor’s Third Review 

Report, the Company shall adopt and implement all recommendations in the report, provided, 

however, that as to any recommendation that the Company considers unduly burdensome, 

impractical, costly, or inconsistent with applicable law or regulation, the Company need not adopt 

that recommendation at that time, but may submit in writing to the Monitor and the Commission 

staff within thirty (30) days of receiving the report, an alternative policy, procedure, or system 

designed to achieve the same objective or purpose.10 

23. In the event the Company and the Monitor are unable to agree on an acceptable 

alternative proposal within thirty (30) days, the Company shall promptly consult with the 

Commission staff.  Any disputes between the Company and the Monitor with respect to the 

recommendations shall be decided by the Commission staff in its sole discretion.  The 

Commission staff shall consider the Monitor’s recommendation and the Company’s reasons for 

not adopting the recommendation in determining whether the Company has fully complied with 

its obligations.  Pending such determination, the Company shall not be required to implement any 

contested recommendation(s). 

Certification 

 

24.  No later than sixty (60) days after implementation of the recommendations in the 

Monitor’s Third Review Report, the Monitor shall certify whether the Company’s compliance 

program, including its policies and procedures, is reasonably designed and implemented to prevent 

and detect violations of the FCPA and is functioning effectively.   Such certification shall be 

supported by a written Final Certification Report that certifies the Company’s compliance with its 

obligations under the Final Judgment, and which shall set forth an assessment of the sustainability 

of the Company’s remediation efforts and may also recommend areas for further follow-up by the 

Company.   

25.  The monitor shall orally notify the Commission staff at least fourteen (14) days prior to 

the issuance of the Final Certification Report whether he or she expects to be able to certify as 

provided herein.  In the event the Monitor is unable to certify within the three year term of the 

monitor period, the following extension provisions shall be in effect. 



 

 11 

Extension of Monitor Period 

26.  If, as informed by the Monitor’s inability to certify that the Company’s compliance 

program, including its policies and procedures, is reasonably designed and implemented to prevent 

and detect violations of the FCPA and is functioning effectively, the Commission staff concludes 

that the Company has not successfully satisfied its obligations under the Monitorship, the Monitor 

Period shall be extended for a reasonable time. 

27. Under such circumstances, the Monitor shall commence a Fourth Review no later 

than sixty (60) days after the Commission staff concludes that the Company has not successfully 

satisfied its compliance obligations under the Final Judgment (unless otherwise agreed by the 

Company, the Monitor, and the Commission staff).  The Monitor shall issue a written Fourth 

Review Report within ninety (90) days of commencing the Fourth Review in the same fashion as 

set forth in Paragraph 13 with respect to the First Review and in accordance with the procedures 

for follow-up reports set forth in Paragraphs 17 to 21.  A determination to terminate the 

Monitorship shall then be made in accordance with Paragraph 24. 

28. If, after completing the Fourth Review the Monitor is unable to certify, the 

Monitorship shall be extended, and the Monitor shall commence a Fifth Review (unless otherwise 

agreed by the Company, the Monitor, and the Commission staff).  The Monitor shall issue a 

written Fifth Review Report within ninety (90) days of commencing the Fifth Review in the same 

fashion as set forth in Paragraph 13 with respect to the First Review and in accordance with the 

procedures for follow-up reports set forth in Paragraphs 17 to 21.  These reviews shall continue 

until the Monitor is able to certify, or unless as otherwise agreed by the Company and 

Commission staff. 



 

 12 

Discovery of Potential or Actual Misconduct 

29. Throughout the Term of the Monitorship, the Monitor shall disclose to the 

Commission staff any credible evidence that corrupt or otherwise suspicious transactions 

occurred, or payments or things of value were offered, promised, made, or authorized by any 

entity or person within the Company, or any entity or person working directly or indirectly for or 

on behalf of the Company, or that related false books and records may have been maintained by 

or on behalf of the Company or that relevant internal accounting controls were circumvented or 

were not reasonably designed or implemented.  The Monitor shall contemporaneously notify the 

Company’s General Counsel, Chief Compliance Officer, or Audit Committee for further action 

unless at the Monitor’s discretion he or she believes disclosure to the Company would be 

inappropriate under the circumstances.  The Monitor shall address in his or her reports the 

appropriateness of the Company’s response to all improper activities, whether previously 

disclosed to the Commission staff or not. 

Certification of Completion  

30. No later than sixty (60) days from date of the completion of the undertakings with 

respect to the Monitorship, the Company shall certify, in writing, compliance with the undertakings 

set forth above.  The certification shall identify the undertakings, provide written evidence of 

compliance in the form of a narrative, and be supported by exhibits sufficient to demonstrate 

compliance.  The Commission staff may make reasonable requests for further evidence of 

compliance, and the Company agrees to provide such evidence. 



 

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Extensions of Time 

 31. Upon request by the Monitor or the Company, the Commission staff may extend 

any procedural time period set forth above for good cause shown. 

Confidentiality of Reports 

32. The reports submitted by the Monitor and the periodic reviews and reports 

submitted by the Company will likely include confidential financial, proprietary, competitive 

business, or commercial information.  Public disclosure of the reports could discourage 

cooperation, impede pending or potential government investigations, or undermine the objective 

of the reporting requirement.  For these reasons, among others, the reports and the contents 

thereof are intended to remain and shall remain non-public, except (i) pursuant to court order, (ii) 

as agreed to by the parties in writing, (iii) to the extent that the Commission determines in its 

sole discretion that disclosure would be in furtherance of the Commission’s discharge of its 

duties and responsibilities, or (iv) as is otherwise required by law. 

Address for All Written Communications and Reports 

 
 33. All reports or other written communications by the Monitor or the Company 

directed to the Commission staff shall be transmitted to Tracy L. Price, Assistant Director, FCPA 

Unit, Division of Enforcement, U.S. Securities and Exchange Commission, 100 F Street NE, 

Washington D.C. 20549.