Mead Johnson: Lessons about enforcement practices and expectations to self-report

The FCPA Blog
07.31.15
In this blog post, Marc Alain Bohn discusses the recent Mead Johnson Nutrition Co. settlement with the Securities and Exchange Commission (SEC), in which Mead Johnson agreed to pay $12 million to resolve allegations that it violated accounting provisions of the Foreign Corrupt Practices Act (FCPA). He reviews several noteworthy aspects of the settlement that are worth exploring, but said "[t]he most interesting facet of this case, in my view, is what it suggests about the SEC's expectations relating to voluntary disclosures and compliance." Bohn notes that the SEC faulted Mead Johnson for not self-reporting the allegations and for failing to promptly inform the SEC about the company's prior investigation into the matter, which identified no wrongdoing, when approached by the agency in 2013. "Does this mean a company investigating significant corruption-related allegations must make a voluntary disclosure, even if the company has not managed to corroborate the allegations?" Bohn says "[n]ot necessarily," explaining, however, that "if a company has decided against voluntarily disclosing allegations of misconduct -- something it has no affirmative obligation to do -- it is critical for the company to conduct a thorough and well-documented internal investigation that is clear-eyed about the investigation results and can be defended to the agencies in the event the government ever becomes aware of the allegations."
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