Bristol-Myers Squibb Co. agreed to pay $300 million in a deal to defer federal prosecution of a conspiracy charge stemming from an accounting scandal, the company said Wednesday. Two of its former executives also were indicted in connection with the same scandal.
Frederick Schiff, Bristol-Myers former chief financial officer, and Richard Lane, former executive vice president and president of the company's worldwide medicines group, were indicted on charges of conspiracy and securities fraud.
The company said that it would record an additional reserve of $249 million in the second quarter related to the settlement.
With Wednesday's fine, Bristol-Myers has doled out about $800 million to settle lawsuits and investigations tied to the incentives it paid wholesalers to stockpile inventory, inflating sales and earnings. In March 2003, Bristol-Myers restated $900 million in profits and $2.5 billion in revenues reported from 1999 through the first half of 2002.
As part of the agreement, Peter Dolan will relinquish the title of chairman but will remain CEO. Long-time board member and former American Express Co. chairman James D. Robinson III will become the company's chairman. The company also agreed to have a federal judge act as an independent monitor of its accounting practices and financial controls.
