On December 20, 2012, the SEC settled an FCPA action with Eli Lilly and Company (“Lilly”), resolving an investigation the SEC began in 2003.  In the early-mid 2000s, DOJ and SEC initiated an inquiry into potentially corrupt practices in the medical and pharmaceutical industry that focused on many major companies in the industry, including Lilly.  The SEC’s complaint against Lily alleges conduct over a 15-year period in multiple countries and involving various alleged improper payment mechanisms.  One set of allegations involved charitable contributions made in Poland, between 2000 and 2003, by a Lilly subsidiary to a charity founded and administered by a government official with influence over government purchasing.  Employees from Lilly’s subsidiary made the payments because the charity was the official’s “hobby” and they intended to influence his government purchasing decisions.  There was nothing otherwise inappropriate about the charitable contributions.  Other issues raised were Lilly’s inadequate policies for flagging and investigating unusual distributor discounts.  For example, in Brazil, the company provided unusually high discounts to distributors.  Some subsidiary personnel knew the discounts were unusually high so as to fund improper payments to officials by the distributor; others in the company failed to adequately review the high discounts.  Another alleged improper payment mechanism involved paying suppliers that were connected to government officials.  The SEC alleged that Lilly earned nearly $14M in profits in total as a result of improper payments.  In its settlement with the SEC, Lilly agreed to pay $29.4 million, including $13,955,196 disgorgement of profits, prejudgment interest of $6,743,538, and a civil penalty of $8,700,000.  See SEC Lit. Release 2012-273, SEC Charges Eli Lilly and Company with FCPA Violations (Dec. 20, 2012); Complaint, SEC v. Eli Lilly and Co., No. 12-2045 (D.D.C. Dec. 20, 2012).