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In the Matter of SciClone Pharmaceuticals, Inc.

 
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SciClone Pharmaceuticals, Inc.
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SEC Civil
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February 4, 2016
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In the Matter of SciClone Pharmaceuticals, Inc.
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In the Matter of SciClone Pharmaceuticals, Inc., Admin. Pro. File No. 3-17101 (2016)
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The SEC’s case against SciClone is one of numerous FCPA enforcement actions involving allegedly improper payments of cash, gifts, or entertainment to healthcare officials at state owned hospitals in China.
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Healthcare-Pharmaceutical
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China
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2007; 2008; 2009; 2010; 2011; 2012
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Health care providers (“HCPs”) at state-owned hospitals in China and other foreign officials in China.
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SciClone Pharmaceuticals, Inc. is an American pharmaceutical company headquartered in Foster City, California. SciClone maintains a class of stock traded on the NASDAQ and is an issuer as defined by the FCPA.

According to the SEC, between 2007 and 2012, employees and agents of SciClone’s subsidiaries conducting business in China, including SciClone Pharmaceuticals International Ltd. (“SPIL”), gave money, gifts, and other things of value to healthcare professionals employed by state-owned hospitals in China to allegedly obtain sales of SciClone pharmaceutical products. The SEC claims that SciClone’s managers were aware of these practices but did nothing to stop them.

For example, a regulatory affairs specialist hired by SciClone allegedly arranged for two foreign officials to travel to Greece for a conference related solely to SciClone’s new medical device. When the trip was cancelled due to visa issues, the specialist allegedly provided these officials with at least $8,600 in “lavish gifts.” Thereafter, the SEC alleges, the specialist submitted two expense reimbursements for these gifts, one of which was approved by SPIL’s senior vice president. SciClone subsequently fired the specialist upon learning of the gifts and conducted a limited internal investigation that ended in 2008, with no further action or remedial measures.

Other examples offered by the SEC include cases where SciClone funded travel for foreign officials with limited to no educational/business purpose. Instead, according to the SEC, the trips largely involved sightseeing and other recreational activities.

On February 4, 2016 the SEC announced that it settled its enforcement action against SciClone Pharmaceuticals, Inc. through an administrative proceeding. According to the cease-and-desist order, SciClone Pharmaceuticals, Inc. agreed to pay a total of $12,826,000 in sanctions for alleged violations of the FCPA’s anti-bribery, books-and-records, and internal controls provisions.
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Anti-bribery (Issuer), Books and records (Issuer), Internal controls (Issuer)
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Cease and Desist
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SciClone Pharmaceuticals, Inc. settled the SEC action by agreeing to pay disgorgement of $9,426,000, prejudgment interest of $900,000, and a civil penalty of $2,500,000.
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12,826,000
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0
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Issuer
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U.S.
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United States
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Contract Procurement/Retention, Legislation, License/Permit
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Not stated.
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Cash, Entertainment, Gifts, Meals, Travel
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Not stated.
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China
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No
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No