Teva's internal probe turns up 'likely' corruption
- According to information discovered by Israel-based Teva, affiliates in Russia and other countries may have provided false information to local authorities about marketing and promotions.
- If investigators are able to confirm the unethical behavior, those involved will have violated the U.S. Foreign Corrupt Practices Act.
- Teva's stock was not affected by this disclosure and continued to trade around $57 when the news came out on Wednesday.
The context in which this investigation took place was the creation of a standard F-20 SEC filing in which Teva provided pro forma information about its comprehensive business including its operations globally, its core therapeutic areas and drugs, its R&D activities and factors that could have an adverse effect on the company's business, such as currency fluctuations, patent expirations, tax liabilities and the growing competition the company is facing against its biggest-selling product, Copaxone (glatiramer acetate). Given the comprehensive nature of this type of filing, it is probable that the behavior that provoked the attention of Teva's legal department became obvious only when company officials chose to look more closely at irregularities.