(By Balachander) Pfizer Inc. (NYSE:PFE) will pay a fine totaling $60 million to resolve allegations that its employees and agents bribed foreign officials to boost the company's business.
The Securities and Exchange Commission (SEC) alleges that Pfizer's overseas subsidiaries made improper payments to government officials in Bulgaria, Croatia, Kazakhstan and Russia. Employees in each of the involved subsidiaries tried to conceal the true nature of the transactions by improperly recording them on the books and records of the respective subsidiaries.
According to the SEC's complaint against Pfizer, the misconduct dates back as far as 2001. Pfizer made an initial voluntary disclosure of misconduct by its subsidiaries to the SEC and U.S. Department of Justice in October 2004, and fully cooperated with SEC investigators.
"Pfizer subsidiaries in several countries had bribery so entwined in their sales culture that they offered points and bonus programs to improperly reward foreign officials who proved to be their best customers," said Kara Brockmeyer, Chief of the SEC Enforcement Division's Foreign Corrupt Practices Act Unit.
Pfizer agreed to pay more than $45 million under the terms of the settlement with the SEC. Pfizer's HCP subsidiary will pay $15 million to resolve similar bribery probe by the Justice Department.
"Pfizer took short cuts to boost its business in several Eurasian countries, bribing government officials in Bulgaria, Croatia, Kazakhstan and Russia to the tune of millions of dollars," said Principal Deputy Assistant Attorney General Raman of the Justice Department's Criminal Division.
Pfizer neither admitted nor denied the allegations.
The stock retreated 1.65 percent to trade at $23.86 on Tuesday. Over the past year, shares have been trading between $16.63 and $24.49.