X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Bristol-Myers Squibb Co. agreed to pay $300 million in a deal to defer federal prosecution of a conspiracy charge stemming from an accounting scandal, the U.S. Attorney’s Office in New Jersey said Wednesday. Two of its former executives also were indicted for their alleged roles in the same scandal. Frederick Schiff, Bristol-Myers former chief financial officer, and Richard Lane, former executive vice president and president of the company’s worldwide medicines group, were indicted on charges of conspiracy and securities fraud. The company said that it would record an additional reserve of $249 million in the second quarter related to the settlement. Its shares fell 27 cents, or 1.1 percent, to $25.19 in afternoon trading on the New York Stock Exchange. With Wednesday’s payment, Bristol-Myers has doled out about $800 million to settle lawsuits and investigations tied to the incentives it paid wholesalers to stockpile inventory, inflating sales and earnings. In March 2003, Bristol-Myers restated $900 million in profits and $2.5 billion in revenues reported from 1999 through the first half of 2002. “This is a case where Bristol-Myers Squibb failed to disclose relevant information to its shareholders that would have affected its stock price,” said Christopher J. Christie, U.S. Attorney for New Jersey. Christie declined to answer reporters’ questions about why more executives, including Bristol-Myers CEO Peter Dolan, were not indicted. He said the investigation is continuing and more charges are possible. As part of the agreement, Dolan will relinquish the title of chairman but will remain CEO. Longtime board member and former American Express Co. chairman James D. Robinson III will become the company’s chairman. The company also agreed to have federal judge Frederick B. Lacey act as an independent monitor of its accounting practices and financial controls. Lacey has already been working with the company from a previous agreement with the U.S. Securities and Exchange Commission. Bristol-Myers reached the deal under what is called a deferred prosecution. Under such arrangements, prosecution is delayed and will be dropped if certain terms are met. Bristol-Myers’ prosecution will be dropped after two years if it meets standards such as retaining Lacey, appointing an additional director, introducing more financial controls, and cooperating with the investigation. In a statement, Dolan said he was “very pleased” to have an agreement with the U.S. Attorney. “We are determined that the mistakes of the past not be repeated and that the company’s reputation for adhering to the highest standards for ethical business practices be fully restored,” he said. Christie called Schiff the company’s “chief concealment officer” and said that Lane was “a cheat.” If found guilty, the two face up to ten years in prison and $1 million in fines. AP Business Writer Theresa Agovino contributed to this story. Copyright 2005 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

Want to continue reading?
Become a Free ALM Digital Reader.

Benefits of a Digital Membership:

  • Free access to 1 article* every 30 days
  • Access to the entire ALM network of websites
  • Unlimited access to the ALM suite of newsletters
  • Build custom alerts on any search topic of your choosing
  • Search by a wide range of topics

*May exclude premium content
Already have an account?

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.