Compliance & Ethics

More than three years after the Securities and Exchange Commission brought its case, a federal court has handed the regulator what amounts to a decisive victory against cannabis company American Patriot Brands, its subsidiaries, and the company's chief executive and chief operating officer. The judgment reaches well beyond monetary sanctions. It permanently bars the two executives from leading public companies or participating in most securities offerings, while ordering the companies to surrender millions the court determined were tied to the misconduct.

The numbers arrive in clusters, almost daring the eye to become numb. $579.5 million (AUD $830 million) in court-ordered civil penalties, 449.5 million (AUD $644 million) to be returned to consumers and investors, more than 250 investigations, twenty-five criminal convictions etc. Read too quickly, they blur into the familiar arithmetic of regulation, another annual accounting of enforcement activity. Read more carefully, and something else emerges. This was not simply a year in which the Australian Securities and Investments Commission imposed larger penalties than before. It was a year in which nearly every lever available to a financial regulator (civil litigation, criminal prosecution, remediation, market intervention) was pulled with unusual force.

A Massachusetts-based drugmaker, EyePoint Pharmaceuticals, has agreed to pay $4,657,463.18 to resolve allegations that it violated the False Claims Act by paying kickbacks to certain ambulatory surgery centers to encourage them to purchase and dispense DEXYCU, an injectable treatment approved for ocular inflammation following cataract surgery. The alleged conduct spans from Jan. 1, 2019, through March 1, 2023. Under separate agreements, EyePoint will also pay an additional $21,518.68 to certain participating states.

There are few assets as carefully protected as the right to call yourself an Olympic sponsor. Companies spend years negotiating for that privilege and millions securing it. Others, seeing the attention the Games inevitably command, sometimes try a less expensive route, such as standing close enough to borrow the glow without ever paying for the light. Italy's competition regulator has decided that six companies crossed that line.

The Department of Justice's Evaluation of Corporate Compliance Programs contains a question that would have sounded almost eccentric a generation ago. Prosecutors are instructed to ask whether a company has measured its culture. Not whether it published a code of conduct polished to a corporate sheen, nor whether employees dutifully completed another round of ethics training before the deadline, but whether the organization possesses evidence, actual evidence, about the beliefs and behaviors that determine what happens after the policy manual closes and the meeting adjourns.

Laboratory testing is supposed to answer a medical question. The Justice Department says one of Labcorp's testing panels answered another as well: how to bill Medicare. The laboratory diagnostics company has agreed to pay $14.5 million to resolve allegations that it submitted false claims to Medicare Part B for medically unnecessary urine drug testing performed through a panel marketed as ToxAssure Comprehensive.

A bipartisan coalition of 49 attorneys general has secured more than $29 million from Glenmark Pharmaceuticals to resolve allegations that the company participated in a long-running scheme to inflate the prices of generic prescription drugs, New York Attorney General Letitia James announced Wednesday.