Pharmaceutical Company Punished: "You Must Pay for an Ethics Professorship"
From the AP: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 26 cents to close at $25.20 in trading on the New York Stock Exchange, near the high end of the 52-week range of $22.22 to $26.60. 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 revenue reported from 1999 through the first half of 2002.The punishment? Big changes in its internal structure plus:
The company must also endow a chair at Seton Hall University Law School in Newark dedicated to teaching business ethics and corporate governance. The person holding that position will conduct an annual seminar for Bristol-Myers executives.- Art Caplan
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