Medical Manufacturer Settles Accounting Fraud Charges
Alere Inc., a Massachusetts-based medical manufacturer, agreed to pay over $13 million to settle SEC charges of accounting fraud—through premature revenue recognition by its South Korean subsidiary and similar practices at other subsidiaries—and foreign bribery via improper payments to officials in India and Colombia, without admitting or denying the allegations.
Alere Inc. agreed to pay $13 million to resolve SEC charges involving accounting fraud and violations of the Foreign Corrupt Practices Act. Its South Korean subsidiary inflated revenues by prematurely recording sales of diagnostic equipment that had not been delivered, while subsidiaries in India and Colombia used distributors to make improper payments to foreign government officials to secure business. Alere failed to maintain adequate internal controls, falsified its financial records, and paid $3,328,689 in disgorgement, $495,196 in interest, and a $9.2 million penalty in settlement.
Alere Inc., a Massachusetts-based medical manufacturer, agreed to pay over $13 million to settle SEC charges of accounting fraud and foreign bribery. Its South Korean subsidiary improperly inflated revenues by prematurely recording sales of diagnostic testing equipment that were still stored in warehouses and had not been delivered to customers, a practice replicated at several other subsidiaries. In India and Colombia, Alere used distributors and consultants to make improper payments to government officials to obtain or retain business, violating the Foreign Corrupt Practices Act. The company failed to maintain adequate internal controls and inaccurately recorded these illicit payments in its books and records. In consenting to the SEC’s order without admitting or denying the findings, Alere paid $3,328,689 in disgorgement of ill-gotten gains, $495,196 in interest, and a $9.2 million civil penalty. The SEC’s investigation was conducted by a team of agents and received assistance from the U.S. Attorney’s Office for the District of Massachusetts, the Department of Justice, and the Public Company Accounting Oversight Board. The case underscores systemic failures in financial reporting and compliance across Alere’s global operations.
Exhibits & Attached Documents (1)
Extracted insights
- $13.00M $13 million $10M–$100M
- $9.20M $9.2 million $1M–$10M
- $3.33M $3,328,689 $1M–$10M
- $495K $495,196 $100K–$1M
- company alere inc.
- agency director of the sec's boston regional office
- person paul levenson
- agency Securities and Exchange Commission
- company south korean subsidiary of alere inc.
- Alere Inc. agreed to pay $13 million to settle accounting fraud charges
- Alere Inc. committed accounting fraud through subsidiaries to meet revenue targets
- Alere Inc. made improper payments to foreign officials to increase sales
- South Korean subsidiary of Alere Inc. improperly inflated revenues by prematurely recording sales for undelivered products
- Alere engaged in improper revenue recognition practices at several other subsidiaries
- Alere subsidiaries in India and Colombia obtained or retained business by making improper payments to government officials
- Alere failed to maintain adequate internal controls to prevent improper payments
- Alere inaccurately recorded improper payments in its books and records
- Alere agreed to pay disgorgement of $3,328,689 plus interest of $495,196 and penalty of $9.2 million
- SEC issued order finding accounting fraud and improper payments by Alere
- Paul Levenson is Director of the SEC's Boston Regional Office
A Massachusetts-based medical manufacturer has agreed to pay more than $13 million to settle charges that it committed accounting fraud through its subsidiaries to meet revenue targets and made improper payments to foreign officials to increase sales in certain countries. The Securities and Exchange Commission issued an order finding that the South Korean subsidiary of Alere Inc., which produces and sells diagnostic testing equipment, improperly inflated revenues by prematurely recording sales for products that were still being stored at warehouses or otherwise not yet delivered to the customers. According to the SEC’s order, Alere also engaged in improper revenue recognition practices at several other subsidiaries. “Our securities laws give investors the right to a fair picture of public companies’ finances. For Alere, that picture was distorted by multiple accounting failures and by outright fraud,” said Paul Levenson, Director of the SEC’s Boston Regional Office. The SEC’s order also finds that Alere subsidiaries in India and Colombia obtained or retained business by using distributors or consultants to make improper payments to officials of government agencies or entities under government control. Alere failed to maintain adequate internal controls to prevent the payments, and the company inaccurately recorded the payments in its books and records. In consenting to the SEC’s order without admitting or denying the findings, Alere agreed to pay disgorgement of ill-gotten gains totaling $3,328,689 plus interest of $495,196 and a penalty of $9.2 million. The SEC’s investigation was conducted by Alicia Reed, Trevor Donelan, Marc Jones, Asita Obeyesekere, Peter Bryan Moores, and Kevin Currid. The SEC appreciates the assistance of the U.S. Attorney’s Office for the District of Massachusetts, the Department of Justice, and the Public Company Accounting Oversight Board.
A Massachusetts-based medical manufacturer has agreed to pay more than $13 million to settle charges that it committed accounting fraud through its subsidiaries to meet revenue targets and made improper payments to foreign officials to increase sales in certain countries. The Securities and Exchange Commission issued an order finding that the South Korean subsidiary of Alere Inc., which produces and sells diagnostic testing equipment, improperly inflated revenues by prematurely recording sales for products that were still being stored at warehouses or otherwise not yet delivered to the customers. According to the SEC’s order, Alere also engaged in improper revenue recognition practices at several other subsidiaries. “Our securities laws give investors the right to a fair picture of public companies’ finances. For Alere, that picture was distorted by multiple accounting failures and by outright fraud,” said Paul Levenson, Director of the SEC’s Boston Regional Office. The SEC’s order also finds that Alere subsidiaries in India and Colombia obtained or retained business by using distributors or consultants to make improper payments to officials of government agencies or entities under government control. Alere failed to maintain adequate internal controls to prevent the payments, and the company inaccurately recorded the payments in its books and records. In consenting to the SEC’s order without admitting or denying the findings, Alere agreed to pay disgorgement of ill-gotten gains totaling $3,328,689 plus interest of $495,196 and a penalty of $9.2 million. The SEC’s investigation was conducted by Alicia Reed, Trevor Donelan, Marc Jones, Asita Obeyesekere, Peter Bryan Moores, and Kevin Currid. The SEC appreciates the assistance of the U.S. Attorney’s Office for the District of Massachusetts, the Department of Justice, and the Public Company Accounting Oversight Board.