Re: Rotten Bristol-Myers Squibb?? Polyurathene Breast implants were manufactured by this company:

June 6, 2005

Unbelievable! I can’t believe that no one is going to jail and they had such a lenient sentence. Martha gets sent to jail, Enron closes yet BMS gets off with a fine.

Kenda

This is interesting....love....Lea

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Emailing: 06bristol

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Bristol-Myers Seen Settling Case by U.S.

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By STEPHANIE SAUL

Published: June 6, 2005

The drug maker Bristol-Myers Squibb </redirect/marketwatch/redirect.ctx?MW=http://custom.marketwatch.com/custom/nyt-com/html-companyprofile.asp & amp;symb=BMY> is expected to agree to pay nearly $300 million to end a Justice Department criminal investigation of its accounting practices, according to people briefed on the prospective settlement.

If a deal is reached, the penalties paid by Bristol-Myers will total about $800 million. That would include civil settlements of $389 million reached with investors in the last year and fines by the Securities and Exchange Commission of $150 million.

The company is expected to take a large charge to pay the Justice Department settlement, probably this quarter, which would affect its operating profit. But a penalty of the size anticipated in this week's settlement is not likely to jeopardize Bristol-Myers's annual dividend, analysts have said.

The agreement, which could be formally announced as early as tomorrow, would help close a bleak chapter in the company's 118-year history. During the investigation, which began in 2002, federal agents paid early-morning visits to the homes of retired executives, interviewed more than 100 current and former employees, and pored over boxes of Bristol-Myers documents.

In addition to the payments, the agreement with prosecutors is said to require that the company - a producer of drugs, medical devices and over-the-counter health products - establish government-supervised compliance and disclosure and ethics programs to prevent the type of accounting manipulations that prompted the investigation.

The accusations against the company involved a practice known as " channel stuffing. " Under the practice, Bristol-Myers paid incentives to its wholesalers to stockpile inventory, making it appear as if the company's sales were higher than they actually were. Then, Bristol-Myers reported the inflated revenue figures to investors.

The company's chief executive, R. Dolan, acknowledged in 2002 that it had engaged in the practice, and Bristol-Myers said later that the practice had resulted in overstated revenue of about $2.5 billion from 1999 to 2002. The bulk of the problems occurred before Mr. Dolan became chief executive.

Bristol-Myers stock, which had traded in the 50's before the acknowledgement, slumped afterward. Since then, the shares have been stuck in the middle 20's, slightly underperforming a battered pharmaceutical industry. The shares closed on Friday at $25.22, down 28 cents.

The agreement between Bristol-Myers and the United States attorney in Newark, J. Christie, is known as a " deferred prosecution. " This is an increasingly common arrangement in corporate criminal cases in which charges are delayed - with the promise that they will ultimately be dropped - if the subjects comply with terms required by the prosecutors.

While sometimes criticized as slaps on the wrist, deferred prosecution agreements are intended to ensure continued corporate viability and preserve jobs, while at the same time sending a message that the government will not tolerate criminal conduct.

Bristol-Myers Squibb, which is based in New York, employs about 43,000 people, 6,000 of them in New Jersey. Mr. Christie is said to have been concerned about the impact of his office's investigation on the company, fearing that more severe action would have resulted in layoffs. The company had been cooperating with the government.

Jo White, a private lawyer who formerly served as United States attorney in Manhattan, was hired by Bristol-Myers Squibb to handle negotiations with Mr. Christie's office.

While a prosecutor, Ms. White was involved in several deferred prosecutions, including a 1994 case in which Prudential Securities acknowledged that it committed crimes in the sale of limited partnerships and agreed to pay $330 million in fines. Prudential was placed on probation for three years, after which charges were dropped. During that period, the company's operations were under government supervision.

A Bristol-Myers agreement is expected to work in a similar way. If the agreement is announced this week, Mr. Christie's office is likely to describe the case it could have brought against Bristol-Myers Squibb. A person who has been briefed on the agreement said it would also contain some " special provisions " involving executives of the company.

In previous deferred prosecutions, corporate executives have agreed to disgorgement, or repayment of bonuses received as a result of criminal activities. It was not clear whether there would be any such provisions in a Bristol-Myers settlement.

A spokesman for the company, Tony Plohoros, declined to comment yesterday on the expected announcement, and a spokesman for Mr. Christie's office, Drewniak, also said he would have no statement.

Bristol-Myers's payment of $300 million to investors was in class-action litigation partly related to the channel stuffing accusations.

Last week, the company announced that it had settled a related case for $89 million. That was paid to four investors who opted out of the class-action settlement.

Bristol-Myers has recently warned investors of impending civil and criminal penalties. In the first quarter, it added $110 million to its litigation-related reserves. The charge resulted in revised first-quarter earnings of $533 million, or 27 cents a share, reflecting a decline of about 45 percent from the quarter a year earlier.

The $110 million brought the company's litigation reserve to $140 million, but much of that was depleted by the $89 million. Apparently in anticipation of an announcement this week, Bristol-Myers said that it expected to take another litigation-related charge this quarter, but it did not disclose how much that would be.

Among Bristol-Myers's major products are Plavix, which helps prevent blood clots, and Pravachol, a cholesterol-lowering drug.

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