In the Matter of Stryker Corporation (2013)

• Case Name
• In the Matter of Stryker Corporation (2013)

• Date Filed
• 10/24/2013

• Enforcement Agency
• SEC

• Countries
• Argentina, Greece, Mexico, Poland, Romania

• Foreign Official
• Employees at Mexican social security agency; Employees at publicly owned hospitals in Poland; Employees at publicly owned hospitals in Greece; Employees at public hospitals in Romania; Employees at public hospitals in Argentina.

• Date of Conduct
• 2003 to 2008

• Nature of Business
• Stryker Corporation, a Michigan corporation with its principal offices in Michigan, manufactures and distributes medical devices and products worldwide.  It maintains a class of common stock registered pursuant to Section 12(b) of the Exchange Act and Listed on the New York Stock Exchange.

• Influence to be Obtained
• According to the findings in the SEC’s cease-and-desist order, between August 2003 and February 2008, Stryker subsidiaries in Argentina, Greece, Mexico, Poland, and Romania made illicit payments to public health care officials, including doctors and health administrators at various state-owned hospitals, universities, and health agencies.  According to the order, Stryker routinely mischaracterized the payments on its corporate books and records as legitimate consulting services and contracts, travel expenses, charitable donations, or commissions.
  
  In Argentina, Stryker regularly paid commission or “honoraria” to physicians of state-owned hospitals in exchange for their willingness to promote Stryker products.  In Greece, the relevant Stryker subsidiary made a $197,055 donation to a public university to curry favor with an influential professor.  In Poland and Romania, Stryker’s subsidiaries made 32 and 192 illicit payments, respectively, totaling approximately $960,000, often in the form of travel and entertainment benefits or sham consulting agreements. 
  
  In Mexico, Stryker paid state health officials more than $76,000 to obtain or maintain the right to sell its products at certain public hospitals.  On at least one occasion, the relevant Mexican government agency threatened to withdraw its contracts with the company unless Stryker made a payment to a Mexican official.  Stryker made the payments through its local Mexican counsel; the Mexican law firm billed Stryker for the bribe amounts, which Stryker recorded as legal services on its books and records, although no legal services had been provided.  

• Enforcement
• On October 24, 2013, the SEC filed a cease-and-desist order under which Stryker agreed to pay disgorgement and prejudgment interest of $9,783,523, as well as a $3,500,000 civil penalty for violations of the FCPA’s books-and-records and internal controls provisions.

• Amount of the Value
• $2.2 million.

• Amount of Business Related to Payment
• $7.5 million.

• Intermediary
• Subsidiaries; Local law firm.

• Citizenship of Parent Entity
• United States

• Total Sanction
• $ 13,283,523

• Compliance Monitor
• No

• Reporting Requirements
• No

• Case is Pending?
• No

• Total Combined Monetary Sanction
• $ 13,283,523

Stryker Corporation 

• Citation
• In Matter of Stryker Corp., Admin. Proc. File No. 3-15587 (Oct. 24, 2013).

• Date Filed
• 10/24/2013

• Filed Under Seal
• No

• FCPA Statutory Provision
• • Books-and-Records
  • Internal Controls

• Other Statutory Provision
• None

• Disposition
• Cease-and-Desist Order

• Defendant Jurisdictional Basis
• Issuer

• Defendant's Citizenship
• United States