FOR IMMEDIATE RELEASE
Washington D.C., Feb. 28, 2020 —
The Securities and Exchange Commission today announced that Ohio-based pharmaceutical company Cardinal Health, Inc. has agreed to pay more than $8 million to resolve charges that it violated the books and records and internal accounting controls provisions of the Foreign Corrupt Practices Act (FCPA).
According to the SEC’s order, Cardinal’s internal accounting controls were not sufficient to detect improper payments made by employees of its former Chinese subsidiary. The order finds that, between 2010 and 2016, Cardinal China retained thousands of employees and managed two large marketing accounts for the benefit of a European dermocosmetic company whose products Cardinal China distributed.
The dermocosmetic company directed the day-to-day activities of the Cardinal China employees, who used the marketing account funds to promote the dermocosmetic company’s products. According to the order, employees directed payments to government-employed healthcare professionals and to employees of state-owned retail companies who had influence over purchasing decisions.
The order finds that Cardinal did not apply its full accounting controls to the accounts and regularly authorized the payments without reasonable assurances that the transactions were executed appropriately. A profit-sharing agreement with the dermocosmetic company provided Cardinal with a percentage of profits from sales derived from the improper payments. As a result, the order finds, Cardinal also failed to maintain complete and accurate books and records concerning the marketing accounts.
Last month, we posted a clip of “The Jim Bakker Show” in which televangelist Jim Bakker and his guest Sherrill Sellman suggested that a silver solution sold by his network can kill the coronavirus and heal those who have been infected.
The clip generated a good deal of press coverage and on Tuesday, the office of the New York Attorney General sent Baker a cease and desist order instructing him to stop “making misleading claims regarding the Silver Solution’s effectiveness” and to add a disclaimer to the solution that he sell.
Here is the letter in full:
Dear Mr. Bakker:
The New York State Ofﬁce of the Attorney General (“OAG”) is extremely concerned by certain statements made during the February 12, 2020 screening of The Jim Bakker Show. During this screening, you asked your guest Sherrill Sellman if the Silver Solution sold on the show’s website would be effective against the coronavirus, to which Ms. Sherman responded: “Let‘s say it hasn’t been tested on this strain of the coronavirus, but it’s been tested on other strains of the coronavirus and has been able to eliminate it within 12 hours.” New York residents can view your show on the internet and local television, and your show’s website sells Silver Solution products to New York residents.
The 2019 novel coronavirus (2019-nCOV) poses serious consequences to public health, and consumers are concerned as to how they can best protect themselves and their families. Your show’s segment may mislead consumers as to the effectiveness of the Silver Solution product in protecting against the current outbreak. The World Health Organization (“WHO”) has noted that there is no specific medicine to prevent or treat this disease. Therefore, any representation on the Jim Bakker Show that its Silver Solution products are effective at combatting an/or treating the 2019 novel coronavirus violates New York law.
Your show is hereby advised to immediately cease and desist from making misleading claims regarding the Silver Solution’s effectiveness as they violate New York’s consumer protection statutes, Executive Law § 63(12) and General Business Law Article 22-A §§ 349 and 350, which prohibit fraudulent and deceptive business practices and false advertising.
Additionally, you are advised to immediately affix the disclaimer – “These statements have not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure, or prevent any disease.” – to all Silver Solution products listed on the show’s online store.
Within the next ten business days, please contact the undersigned to conﬁrm that the Jim Bakker Show has so complied. Your failure to comply with this directive may result in further action by this ofﬁce. Please be advised that the Ofﬁce of the Attorney General is authorized pursuant to Executive Law § 63(12) and General Business Law Article 22-A to bring suit to enjoin any deceptive acts and practices, and to seek restitution, damages, and penalties of up to $5,000 per violation (§ 35O-d).
Chief, Health Care Bureau