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SEC makes an example of Alere

Tom Fox | November 14, 2017

In September, the Securities and Exchange Commission brought an FCPA-driven enforcement action against Alere, Inc., a Massachusetts-based medical manufacturer, for the company’s extensive revenue recognition failures as well as for bribing foreign officials. 

Alere agreed to pay more than $13M for bribing foreign officials and committing accounting fraud to meet revenue targets. Of that sum, the company agreed to disgorge $3.3 million, interest of about $495,000 and pay a penalty of $9.2 million. 

The SEC found that the South Korean subsidiary of Alere Inc., which produced and sold diagnostic testing equipment, improperly inflated revenues by prematurely recording sales for products that were still being stored at warehouses or otherwise not yet delivered to the customers or the distributors.  

Alere also intentionally engaged in improper revenue recognition practices at several other subsidiaries from 2010 to 2015, noted the SEC order. It turned on a practice... To get the full story, subscribe now.