SEC Raps Former Execs of Bristol-Myers Squibb Co.
The United States District Court in New Jersey has entered final judgments against Frederick S. Schiff, former CFO of Bristol-Myers Squibb Co. (Bristol Myers) and Richard J. Lane, former President of the Worldwide Medicines Group for Bristol Myers.
Schiff and Lane agreed to the judgments without admitting or denying the allegations of the Commission’s complaint, which alleged that for the period January 1, 2000 through December 31, 2001, they “deceived the investing public about the true performance, profitability and growth trends” of Bristol Myers and a t their direction, Bristol Myers engaged in a “channel-stuffing” scheme.
Bristol Myers allegedly used financial incentives to lure wholesalers to buy its pharmaceutical products in excess of prescription demand in order to artificially inflate its results, which in turn was necessary in order to meet Bristol Myers’ internal earnings targets and the consensus earnings estimates of Wall Street securities analysts.
The complaint alleged that by doing so, Bristol Myers improperly recognized revenue from pharmaceutical sales associated with the channel-stuffing.
Schiff consented to a final judgment requiring him to pay disgorgement plus prejudgment interest totaling $130,992, and barring him from serving as an officer or director of a public company for one year.
Lane was ordered to pay disgorgement plus prejudgment interest totaling $36,750. The ruling will bar him from serving as an officer or director of a public company for one year.