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In the Matter of Nordion (Canada) Inc.

 
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Nordion (Canada) Inc.
:
SEC Civil
:
March 3, 2016
:
In the Matter of Nordion (Canada) Inc.
:
In the Matter of Nordion (Canada) Inc., Admin. Pro. File. No. 3-17153 (2016)
:
The SEC noted that Nordion did not appear to profit from the alleged bribery scheme but felt that a $375,000 civil penalty was appropriate given the company’s violations of the FCPA’s books-and-records and internal controls provisions.
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Healthcare-Pharmaceutical
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Russia
:
2004; 2005; 2006; 2007; 2008; 2009; 2010; 2011
:
Unnamed Russian government official
:
Nordion (Canada) Inc. is the successor in interest to Nordion, Inc., a global health science company and provider of medical isotopes and sterilization technologies used by pharmaceutical and biotechnology companies, medical device manufacturers, hospitals, medical clinics, and research laboratories in more than 60 countries. Nordion was headquartered in Ottawa, Canada and maintained a class of stock that was traded on the New York Stock Exchange and was registered with the SEC. In August 2014, Nordion was acquired by Nordion Canada.

According to the SEC, at the recommendation of a Nordion engineer named Mikhail Gourevitch, in 2000, Nordion engaged the services of a Russian businessman (the “Agent”) to assist the company procure a supply of cobalt-60 isotopes from the Russian government. The Agent was allegedly a childhood friend of Gourevitch and had no experience in the nuclear power industry, nuclear medicine, or medical isotopes. Nevertheless, after entering into a consulting agreement with the Agent, the SEC claims that the Agent was able to assist the company acquire the supply of cobalt-60.

Later in 2004, the SEC alleges that Nordion again approached the agent to obtain government approval of a liver cancer treatment called TheraSphere. According to the SEC, Nordion entered into a contract with the Agent to register, license, and distribute TheraSphere in Russia. The SEC claims that to acquire approval, Gourevitch and the Agent attempted to bribe Russian officials by using a portion of the monies received from the Agent’s consulting agreement with Nordion as bribes. The SEC claims that although Nordion had limited internal controls, which it failed to consistently apply, Gourevitch actively attempted to conceal the illicit scheme by manipulating budgets estimates before they were reviewed by Nordion.

In total, the SEC claims that Nordion paid the Agent $235,043 from 2005 to 2011 for purposes of obtaining Russian regulatory approvals of TheraSphere. The SEC notes that Nordion was ultimately unable to distribute TheraSphere in Russia and therefore did not earn any profits as a result of the scheme.

In March 2016, the SEC announced that it settled an enforcement action against Nordion for violations of the FCPA’s books-and-records and internal controls provisions. Nordion agreed to pay a $375,000 civil penalty to settle the SEC’s charges. The SEC gave Nordion cooperation credit for inter alia its willingness to self-disclose the conduct, preform an extensive internal investigation, and report the findings to the SEC.
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Books and records (Issuer), Internal controls (Issuer)
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Cease and Desist
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$375,000 Civil Penalty.
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375,000
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0
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Issuer
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Foreign
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Canada
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Legislation
:
Not stated.
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Cash
:
Customs Broker or Agent/Consultant
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235,043
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Russia
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No
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Yes