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Company: Bristol-Myers Squibb

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Drug bosses face civil fraud suit

Date Class
23rd Aug 2005 Fraud Investigation
 
Details
Two former directors of US drug company Bristol-Myers Squibb are been sued for civil damages after being accused of masterminding a $1.5bn ($833m) fraud.

The Securities and Exchange Commission watchdog alleges that Frederick Schiff and Richard Lane devised a scheme to inflate sales and profits at the firm.

The two men already face related charges of criminal conspiracy, which they have denied.

The company was forced to restate its profits by $900m in 2003.

This followed a disclosure that the company had artificially inflated its sales by giving wholesalers financial incentives to stock its medicines.

The company and its current directors reached a $300m settlement with the SEC earlier this year to avoid criminal prosecution.

It has also paid out $150m to settle civil charges stemming from the allegations.

Regulators argue that Mr Schiff, the firm's former chief financial officer and Mr Lane, another former senior executive, orchestrated a plan to to improperly boost sales while misleading investors and analysts.

The SEC is seeking undisclosed damages from the duo.

Mr Schiff's attorney said his client had already pleaded not guilty to the charges.

"Mr Schiff denies wrongdoing and intends to defend the vigorously against the SEC's complaint," David Zornow said.

Bristol Myers-Squibb has already paid out $800m to settle lawsuits and investigations relating to the stockpiling accusations.

 

 

 


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