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Lesson from Alere enforcement action

Tom Fox | November 3, 2017

Late September saw the release of the Alere Inc. (Alere) SEC enforcement action which contained an FCPA component as well as penalties related to the company’s failures around revenue recognition. Alere agreed to pay more than $13MM to settle charges that it bribed foreign officials and committed accounting fraud to meet revenue targets. Of that $13MM, the company agreed to disgorge $3.3MM, interest of about $495,000 and pay a penalty of $9.2MM. It was at the opposite end of a spectrum from the Telia settlement of $965MM.

The Man From FCPA sees several key issues in the Alere FCPA enforcement action. First is the increasing interplay of revenue recognition and compliance programs. There will no doubt be more overlap under the new revenue recognition rules which become effective in December. It is unsurprising that a company which would play fast and loose with such basic revenue recognition rules as payments to distributors and hold backs by customers would also do the same... To get the full story, subscribe now.