Inside | Real news, curated by real humans
Inside Compliance

Inside Compliance (Jul 22nd, 2019)

1. Novartis has set aside $700 million in anticipation of settling a lawsuit alleging that it paid kickbacks to doctors so that they would overprescribe its drugs to patients. The Justice Department lawsuit alleges that Novartis enticed doctors with expensive meals and other entertainment. The case was brought in 2011 by a whistleblower, Oswald Bilotta, a former company sales representative. The company faces similar allegations in Greece. Novartis CEO Vas Narasimhan said in a recent investment call that the company did not break the law but was setting aside the money while settlement negotiations were underway. - COMPLIANCE WEEK

  • Email gray
  • Permalink gray

2. The Securities and Exchange Commission has charged three former executives at Power Solutions International, an engine manufacturer in Chicago, with overstating revenue by about $25 million. Gary Winemaster, Craig Davis and James Needham are alleged to have violated anti-fraud and other provisions of U.S. securities laws by recording revenue for incomplete sales between 2014 and 2015. An attorney for Winemaster disputed the charges as "an over aggressive theory of enforcement that is attempting to penalize ordinary business practices and business setbacks." - WALL STREET JOURNAL

  • Email gray
  • Permalink gray

3. Basil al Jarah, former partner of Unaoil Group, has pleaded guilty to conspiracy charges related to bribes for oil-related construction projects in southern Iraq. The U.K. Serious Fraud Office brought the charges and also has charged three others while investigating Unaoil, which is based in Monaco. Meanwhile, Honeywell International, based in Charlotte, North Carolina, said it was the subject of U.S. investigations into a subsidiary that worked with Unaoil in Algeria. Honeywell said that it was cooperating with the Justice Department and the Securities and Exchange Commission. - WALL STREET JOURNAL

  • Email gray
  • Permalink gray

4. The past few years have seen an increased interest in compliance issues and hiring of compliance officers in Latin America, a reaction to recent massive financial scandals in the region. Executives are "on edge," reports Americas Quarterly. "If caught, they could go to jail, mar their brand’s reputation and hamper profit growth to a far greater extent than before." And while Latin American companies are hiring, there's a dearth of qualified candidates because the region's educational institutions have yet to produce compliance undergraduate degree courses. - AMERICAS QUARTERLY

  • Email gray
  • Permalink gray

5. Memos filed in federal court in Cleveland on Friday suggested that drug stores, retailers, and branded and generic manufacturers helped overrun the nation with opioids, possibly flouting compliance procedures. "Between 2003 and 2011, lawyers for the plaintiffs said in one filing, Mallinckrodt, the Ireland-based manufacturer of generic and branded drugs, sold 53 million orders of opioids," reported The New York Times. "Yet the company stopped and then reported to federal authorities at most 33 orders as suspicious, a ratio the lawyers described as defying credibility." The plaintiffs' lawyers claim that major drug store chains like CVS and Walgreens did little to check for suspicious orders. - NEW YORK TIMES

  • Email gray
  • Permalink gray

6. Last week, Oakland became the third city to ban municipal authorities from using facial recognition tech, adding to growing compliance concerns as the technology spreads across the country. “[C]onsumers care about their privacy and you may well see more laws that require companies to give notice or consent,” Sheryl Falk, a privacy and data security lawyer, told Law.com. But municipalities ultimately may be overtaken on the issue if comprehensive state and federal laws are passed. - LAW.COM

  • Email gray
  • Permalink gray

7. The European Union has published new regulatory standards for financial institutions that will take effect on Sept. 3. The new measures are aimed at ensuring that EU companies maintain compliance standards when operating in outside jurisdictions. The measures are meant to clamp down on shady financial transactions, including money laundering and terrorist financing. - GLOBAL COMPLIANCE NEWS

  • Email gray
  • Permalink gray

8. Chinese authorities detained the boss of a steel mill after it allegedly failed to meet a mandatory 50 percent production cut to comply with anti-smog laws. The mill is in Tangshan, which produces more steel than any other city in China. The arrest came during a year of record steel production in China, which is dealing with a slowing economy. - NEW YORK TIMES

9. Austin-based MicroVentures seeks chief compliance officer.

  • Email gray
  • Permalink gray

10. PricewaterhouseCoopers seeks a governance risk and compliance senior associate.

  • Email gray
  • Permalink gray

Paul Wachter is a California-based journalist who has written for The New York Times Magazine, Harper's, ESPN, and other publications. 

Editor: Kim Lyons (Pittsburgh-based journalist and managing editor at Inside).

  • Email gray

Subscribe to Inside Compliance