Two men share securities regulation news

Breaking news and expert analysis on legal and compliance issues

[Back To Home][Back To Archives]

From Securities Regulation Daily, January 12, 2017

Medical device manufacturer violates FCPA again, agrees to pay $30M

By Amanda Maine, J.D.

Biomet, Inc., an Indiana-based company that sells medical devices and dental products, has settled charges with the SEC and the Department of Justice regarding claims that it paid off customs officials in Mexico to facilitate the importation of its unregistered and mislabeled dental products. The company agreed to pay more than $30 million in criminal and civil penalties to settle the matter (In the Matter of Biomet, Inc.Release No. 34-79780, January 12, 2017).

Prior proceedings. Biomet had settled previous Foreign Corrupt Practices Act charges with the SEC in 2012 relating to its subsidiaries paying bribes to doctors in South America in the form of so-called commissions in exchange for sales to hospitals. As part of the settlement, Biomet agreed not to use a particular Brazilian distributor. Biomet also entered into a deferred prosecution agreement with the Department of Justice over the charges.

Bribes and prohibited transactions. According to the SEC, Biomet continued to interact and record transactions with the Brazilian distributor despite being forbidden from doing so according to the terms of the settlement. In addition, a Biomet subsidiary used a third-party customs broker to pay customs agents in Mexico to facilitate the smuggling of mislabeled dental products. The SEC alleged that Biomet should have recognized numerous red flags alerting them to the bribes paid to the customs officials by its subsidiary.

Civil and criminal charges. Biomet was acquired by Zimmer Holdings in 2015. The company, renamed Zimmer Biomet, agreed to settle charges with both the SEC and the DOJ. As part of the settlement with the SEC, Biomet agreed to pay $13 million in disgorgement and penalties for its violations of the FCPA.

Biomet entered into a deferred prosecution agreement with the DOJ, under which it agreed to pay over $17 million. Stephen Richardson of the FBI’s Criminal Investigative Division reiterated the department’s commitment to combating bribery by U.S. companies in foreign countries, stating, "Zimmer Biomet failed to rectify their misconduct and get back on track in compliance with the law, and now they are facing the consequences of their corrupt actions."

The release is No. 34-79780.

MainStory: TopStory Enforcement FraudManipulation InternationalNews

Back to Top

Securities Regulation Daily

Introducing Wolters Kluwer Securities Regulation Daily — a daily reporting service created by attorneys, for attorneys — providing same-day coverage of breaking news, court decisions, legislation, and regulatory activity.

A complete daily report of the news that affects your world

  • View full summaries of federal and state court decisions.
  • Access full text of legislative and regulatory developments.
  • Customize your daily email by topic and/or jurisdiction.
  • Search archives for stories of interest.

Not just news — the right news

  • Get expert analysis written by subject matter specialists—created by attorneys for attorneys.
  • Track law firms and organizations in the headlines with our new “Who’s in the News” feature.
  • Promote your firm with our new reprint policy.

24/7 access for a 24/7 world

  • Forward information with special copyright permissions, encouraging collaboration between counsel and colleagues.
  • Save time with mobile apps for your BlackBerry, iPhone, iPad, Android, or Kindle.
  • Access all links from any mobile device without being prompted for user name and password.