SEC Charges Novartis AG with FCPA Violations
Novartis AG agreed to pay over $345 million total to settle FCPA violations involving bribery of healthcare providers in South Korea, Vietnam, and Greece (2012–2016) and forged contracts in China (2013–2015) that caused $50M in losses, resulting in SEC penalties of $112.8M and DOJ criminal fines exceeding $233M.
Novartis AG agreed to pay $112.8 million to the SEC to settle FCPA charges for improper payments to healthcare providers in South Korea, Vietnam, and Greece between 2012 and 2016, as well as inadequate internal controls at its former Alcon subsidiary in China from 2013 to 2015. The SEC found that forged contracts in China led to over $50 million in bad debt write-offs, while the company’s subsidiaries made bribes to secure prescriptions of Novartis and Alcon products. In addition to the SEC settlement, Novartis and Alcon subsidiaries entered into deferred prosecution agreements with the DOJ, agreeing to pay more than $233 million in criminal fines, with Novartis also committing to a three-year compliance reporting requirement.
Novartis AG agreed to pay over $345 million in total to resolve FCPA violations involving systemic corruption and weak internal controls across multiple countries. Between 2012 and 2016, local subsidiaries and former Alcon affiliates made improper payments or provided benefits to public and private healthcare providers in South Korea, Vietnam, and Greece to induce prescriptions of Novartis and Alcon products, with knowledge among certain managers. From 2013 to 2015, Alcon’s China operations used forged contracts in local financing arrangements, resulting in over $50 million in bad debt write-offs due to insufficient accounting controls. The SEC ordered Novartis to pay $92.3 million in disgorgement, $20.5 million in prejudgment interest, and to comply with a three-year self-reporting requirement on remediation efforts, while also issuing a cease-and-desist order. Separately, Novartis and Alcon subsidiaries entered into deferred prosecution agreements with the U.S. Department of Justice, agreeing to pay more than $233 million in criminal fines. The investigation, led by the SEC’s FCPA Unit and supported by the DOJ, FBI, Swiss FINMA, and UK FCA, highlighted how control failures in one region can signal broader organizational misconduct. The case underscores the global reach of FCPA enforcement and the severe financial consequences for multinational corporations with inadequate compliance infrastructure.
Exhibits & Attached Documents (1)
Extracted insights
- $233.00M $233 million $100M–$1B
- $112.00M $112 million $100M–$1B
- $92.30M $92.3 million $10M–$100M
- $50.00M $50 million $10M–$100M
- $20.50M $20.5 million $10M–$100M
- person charles cain
- agency deferred prosecution agreements with the u.s. department of justice
- person novartis ag
- agency Securities and Exchange Commission
- agency the federal bureau of investigation
- agency the sec’s investigation
- agency the sec's order
- agency the securities and exchange commission
- agency the u.s. attorney's office for the district of new jersey
- agency the u.s. department of justice criminal division's fraud section
- person tracy l. price
- The Securities and Exchange Commission announced Novartis AG has agreed to pay over $112 million to settle charges
- Novartis AG agreed to pay over $112 million to settle charges
- The SEC's order finds local subsidiaries or affiliates of Novartis or its former subsidiary Alcon Inc. engaged in schemes to make improper payments or to provide benefits to public and private healthcare providers in South Korea, Vietnam, and Greece in exchange for prescribing or using Novartis or Alcon products
- The order finds Novartis lacked sufficient internal accounting controls within its former Alcon business in China from 2013 to 2015
- The order finds the use of forged contracts as part of local financing arrangements that generated large losses and resulted in Novartis and Alcon writing off more than $50 million in bad debt
- Charles Cain said Poor control environments are fertile soil for malfeasance
- Charles Cain said weaknesses in one part of the business can often serve as a harbinger of larger unaddressed problems
- Novartis consented to the entry of an order requiring the company to cease and desist from committing violations of the books and records and internal accounting controls provisions of the FCPA
- Novartis agreed to pay disgorgement of $92.3 million and $20.5 million in prejudgment interest
- Novartis agreed to comply with a three-year undertaking to self-report on the status of its remediation and implementation of compliance measures
- Subsidiaries of Novartis and Alcon entered into deferred prosecution agreements with the U.S. Department of Justice
- Subsidiaries of Novartis and Alcon agreed to pay more than $233 million in criminal fines
- The SEC’s investigation was conducted by Sonali Singh and Regina Barrett
- The SEC’s investigation was supervised by Tracy L. Price
- The SEC appreciates the assistance of the U.S. Department of Justice Criminal Division's Fraud Section
- The SEC appreciates the assistance of the U.S. Attorney's Office for the District of New Jersey
- The SEC appreciates the assistance of the Federal Bureau of Investigation
- The SEC appreciates the assistance of the Swiss Financial Market Supervisory Authority
- The SEC appreciates the assistance of the United Kingdom Financial Conduct Authority
The Securities and Exchange Commission today announced that Novartis AG, a global pharmaceutical and healthcare company headquartered in Basel, Switzerland, has agreed to pay over $112 million to settle charges that it violated the books and records and internal accounting controls provisions of the Foreign Corrupt Practices Act (FCPA). The SEC's order finds that local subsidiaries or affiliates of Novartis or its former subsidiary Alcon Inc. engaged in schemes to make improper payments or to provide benefits to public and private healthcare providers in South Korea, Vietnam, and Greece in exchange for prescribing or using Novartis or Alcon products. According to the order, these schemes took place between 2012 and 2016 and were known among certain managers of the local subsidiaries or affiliates. The order also finds that Novartis lacked sufficient internal accounting controls within its former Alcon business in China from 2013 to 2015, which used forged contracts as part of local financing arrangements that generated large losses and resulted in Novartis and Alcon writing off more than $50 million in bad debt. "Poor control environments are fertile soil for malfeasance," said Charles Cain, Chief of the SEC Enforcement Division's FCPA Unit. "As illustrated by Novartis' misconduct, weaknesses in one part of the business can often serve as a harbinger of larger unaddressed problems." Novartis consented to the entry of an order requiring the company to cease and desist from committing violations of the books and records and internal accounting controls provisions of the FCPA. Novartis agreed to pay disgorgement of $92.3 million and $20.5 million in prejudgment interest and to comply with a three-year undertaking to self-report on the status of its remediation and implementation of compliance measures. In addition, subsidiaries of Novartis and Alcon entered into deferred prosecution agreements with the U.S. Department of Justice and have agreed to pay more than $233 million in criminal fines. The SEC’s investigation was conducted by Sonali Singh and Regina Barrett and supervised by Tracy L. Price. The SEC appreciates the assistance of the U.S. Department of Justice Criminal Division's Fraud Section, the U.S. Attorney's Office for the District of New Jersey, the Federal Bureau of Investigation, the Swiss Financial Market Supervisory Authority, and the United Kingdom Financial Conduct Authority.
The Securities and Exchange Commission today announced that Novartis AG, a global pharmaceutical and healthcare company headquartered in Basel, Switzerland, has agreed to pay over $112 million to settle charges that it violated the books and records and internal accounting controls provisions of the Foreign Corrupt Practices Act (FCPA). The SEC's order finds that local subsidiaries or affiliates of Novartis or its former subsidiary Alcon Inc. engaged in schemes to make improper payments or to provide benefits to public and private healthcare providers in South Korea, Vietnam, and Greece in exchange for prescribing or using Novartis or Alcon products. According to the order, these schemes took place between 2012 and 2016 and were known among certain managers of the local subsidiaries or affiliates. The order also finds that Novartis lacked sufficient internal accounting controls within its former Alcon business in China from 2013 to 2015, which used forged contracts as part of local financing arrangements that generated large losses and resulted in Novartis and Alcon writing off more than $50 million in bad debt. "Poor control environments are fertile soil for malfeasance," said Charles Cain, Chief of the SEC Enforcement Division's FCPA Unit. "As illustrated by Novartis' misconduct, weaknesses in one part of the business can often serve as a harbinger of larger unaddressed problems." Novartis consented to the entry of an order requiring the company to cease and desist from committing violations of the books and records and internal accounting controls provisions of the FCPA. Novartis agreed to pay disgorgement of $92.3 million and $20.5 million in prejudgment interest and to comply with a three-year undertaking to self-report on the status of its remediation and implementation of compliance measures. In addition, subsidiaries of Novartis and Alcon entered into deferred prosecution agreements with the U.S. Department of Justice and have agreed to pay more than $233 million in criminal fines. The SEC’s investigation was conducted by Sonali Singh and Regina Barrett and supervised by Tracy L. Price. The SEC appreciates the assistance of the U.S. Department of Justice Criminal Division's Fraud Section, the U.S. Attorney's Office for the District of New Jersey, the Federal Bureau of Investigation, the Swiss Financial Market Supervisory Authority, and the United Kingdom Financial Conduct Authority.