SEC sues two ex-Bristol-Myers executives
Reuters reports that the U.S. Securities and Exchange Commission (SEC) has accused two former Bristol-Myers Squibb Co. executives of orchestrating a scheme to deceive investors about the company''s earnings. Frederick Schiff, former chief financial officer, and Richard Lane, former president of the company''s Worldwide Medicine Group unit, were accused of directing a plan that improperly booked $1.5 billion in revenue in 2000 and 2001. In its civil complaint filed in federal court in New Jersey, the SEC said Schiff and Lane were behind the scheme that inflated revenues by coaxing wholesalers to buy more of Bristol-Myers'' drugs than they could hope to sell. Bristol-Myers and its current executives settled with prosecutors in June under a $300 million deferred prosecution deal. In 2004 the company agreed to pay $150 million to settle civil charges brought by the SEC. The SEC began its probe in July 2002 after Bristol-Myers disclosed it had artificially boosted sales by enticing wholesalers to heavily overstock its medicines, a practice called channel stuffing.