SciClone Pharmaceuticals disclosed in a quarterly report this week that it’s discussing a tentative $12.8 million settlement with the Securities and Exchange Commission to resolve an investigation of potential violations of the Foreign Corrupt Practices Act with respect to its China operations.

The tentative settlement relates to a formal investigation launched by the SEC and the Department of Justice in 2010 regarding a "range of matters," including the possibility of FCPA violations, “primarily related to certain historical sales and marketing activities with respect to our China operations,” the company stated.

In response to these matters, SciClone said that its board appointed a special committee of independent directors to oversee its response to the government inquiry. Based on an initial review, the special committee decided to undertake an independent investigation as to matters reflected in and arising from the SEC and Justice Department investigations to evaluate whether any FCPA violation or other laws occurred.

In a Form 10-Q, issued Aug. 10, SciClone said it has “reached agreement in principle regarding a proposed settlement of these matters with the staff of the SEC, subject to documentation and final approval by the Commissioners of the SEC.” Under the terms of the proposed resolution, SciClone, without admitting or denying liability, would consent to the entry of an administrative order requiring that the company cease and desist from any future violations of the FCPA. The company also would agree to pay disgorgement of $9.4 million, prejudgment interest of $0.9 million, and a civil money penalty of $2.5 million.

The company said it continues to cooperate fully with the investigations. SciClone said it has not yet reached a resolution of these matters with the Justice Department, and that “management continues to work diligently to obtain closure on this matter.”

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