U.S.-based Pfizer Inc. says it has resolved U.S. Department of Justice and Securities and Exchange Commission matters related to certain improper payments in the operations of two of its subsidiaries outside the United States, which Pfizer voluntarily reported to the U.S. government beginning in 2004.
To resolve those historical issues, a Pfizer indirect subsidiary named Pfizer H.C.P. Corporation) will enter into a deferred prosecution agreement with the DOJ, and pay a fine of USD15 million. Under the terms of a civil settlement with the SEC, Pfizer Inc. agreed to a disgorgement of profits of USD16 million and prejudgment interest of USD10.3 million. The DOJ declined to bring a criminal action against Pfizer Inc.
In a separate civil settlement also announced with the SEC, Pfizer's Wyeth subsidiary has agreed to a disgorgement of profits of USD17.2 million and prejudgment interest of USD1.66 million to resolve issues involving certain improper payments in the operations of four subsidiaries outside the United States. Pfizer conducted a risk-based Foreign Corrupt Practices Act due diligence review of Wyeth's global operations after it acquired the company in late 2009 and, as it had with its own issues, promptly and voluntarily disclosed these issues to the U.S. government.
Pfizer says there is no allegation by either DOJ or SEC that anyone at Pfizer's or Wyeth's corporate headquarters knew of or approved the conduct at issue before Pfizer took appropriate action to investigate and report it. As soon as these local activities came to the attention of Pfizer's corporate headquarters, they were reportedly voluntarily brought to the attention of the DOJ and SEC.
The DOJ settlement with Pfizer H.C.P. Corporation covers improper conduct in Bulgaria, Croatia, Kazakhstan, and Russia. The Pfizer SEC civil settlement covers improper conduct in all of these countries as well as in Italy, China, the Czech Republic and Serbia.
In addition, Pfizer's post-acquisition due diligence review of Wyeth identified certain improper payments in China, Saudi Arabia, Indonesia and Pakistan. Pfizer identified these legacy-Wyeth issues within 180 days after the acquisition closed, voluntarily disclosed them to the U.S. government, and they are covered in Wyeth's separate SEC civil settlement.
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