SEC fines GlaxoSmithKline $20 million; charges former Puma employee with insider trading

The US Securities and Exchange Commission said on Friday that UK pharma major GlaxoSmithKline (LSE: GSK) has agreed to pay $20 million to settle charges that its Chinese subsidiaries engaged in bribery schemes to increase sales in China.

The SEC statement said that, from at least 2010 to June 2013, employees and agents of GSK China and TSKF (Sino-American Tianjin Smith Kline & French Laboratories) engaged in transactions and schemes to corruptly transfer things of value to foreign officials in China to increase sales of pharmaceutical products. The payments were made to increase sales through increased prescriptions by individual HCPs and purchases by hospital administrative staff responsible for product selection or purchase. The conduct occurred across all geographic areas within the sales and marketing functions and impacted all product lines.

The corrupt payments took varied forms, including gifts, improper travel and entertainment with no or little educational purpose, shopping excursions, family and home visits, and cash. The costs associated with these payments were recorded in GSK’s books and records as legitimate expenses, such as medical association sponsorships, employee expenses, conferences, speaker fees, and marketing costs.