On July 28, 2015, the U.S. Securities and Exchange Commission
(the "SEC") announced that Mead Johnson Nutrition Company
("Mead Johnson") has agreed to a $12 million settlement,
which includes a $3 million penalty, for charges that its Chinese
subsidiary made improper payments to health care professionals at
government-owned hospitals in China.
The SEC investigation found that employees of Mead Johnson in
China violated the Foreign Corrupt Practices Act
("FCPA") by funding improper payments through
"distributor allowance" funds which were paid to
third-party distributors and subsequently used to fund bribes to
health-care professionals in Chinese hospitals to recommend Mead
Johnson's infant formula to new mothers and provide the company
with patients' contact information so it could market its
infant formula to them directly. It is now well-established that
health care professionals and medical staff at government-owned
hospitals are "foreign officials" for the
