Industry Roundup: SEC Fines MJN, Criminal Charge For Herbals Seller, Decree Closes Aspen Supplement Marketer

Mead Johnson Nutrition Co. settles Securities and Exchange Commission charges concerning bribery of health care professionals in China to help drive infant formula sales, two years after China fined the firm in a price-fixing investigation. According to an SEC July 28 statement, Mead Johnson consented to an agency order on violations of the Foreign Corrupt Practices Act, without admitting or denying the findings, and agreed to pay $7.77 million disgorgement, $1.26 million in prejudgment interest and a $3 million penalty. SEC said MJN employees from 2008 to 2013 directed paying “distributor allowance” funds in cash and other incentives to hospitals in China to recommend the firm’s products and provide contact information for marketing its infant formula directly to patients. The Glenview, Ill.-based firm said its payment to SEC is in line with an expense provision it disclosed in an SEC filing earlier in 2015 related to the investigation. MJN also noted it is “taking a number of positive steps to bolster its compliance program, function and processes.” MJN paid a $33 million fine in 2013 as one of six infant formula manufacturers China’s trade regulators accused of price fixing and antimonopoly practices ([A#05140127006]).

A Montana herbal supplement seller faces a criminal contempt charge as the Department of Justice alleges the online retailer continued to sell products with claims of curing diseases despite court orders to stop in 2010 and 2013. DoJ on July 29 said Toby McAdam, owner of Risingsun Health, violated the 2013 order civil contempt complaint, which included an $80,000 fine, by failing to close his online sales sites and a promotional Facebook for his products. In the