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Foreign Corrupt Practices Act & Anti-Corruption

SEC Settles with Health Science Company Nordion and Former Employee Over Bribes to Russian Government Officials

Russia Bribery Nordion

On March 3, the SEC announced it had settled FCPA charges with health science company Nordion (Canada) Inc. and a former engineer, Mikhail Gourevitch, for their role in bribing Russian government officials to obtain approvals for a liver cancer drug.  Nordion and Gourevitch settled their respective cases with the SEC via separate Administrative Orders Instituting Cease-and-Desist Proceedings.  Both Nordion (now a privately held company, but which was publicly-traded on the NYSE during the 2004-2011 time period at issue), and Gourevitch, consented to the SEC orders without admitting or denying the FCPA findings. In the order settling the charges against Nordion, the SEC found that the company violated the FCPA’s books and records and internal accounting controls provisions in connection with payments made to a Russian third-party agent.   According to the SEC, portions of the payments to the agent were used to bribe government officials in Russia to obtain government approval to license, register, and distribute TheraSphere, a Nordion liver cancer therapy drug.  Nordion never ultimately won approval to distribute TheraSphere and did not earn any profits as a result from the improper payments. The order found that Nordion mischaracterized the agent fees as legitimate business expenses and that the company did not (i) have adequate policies and procedures in places to detect corruption risks and (ii) provided little, if any, training regarding how to conduct business in high-risk jurisdictions.  Nordion, which is a leading provider of medical isotopes, targeted therapies, and sterilization technologies, agreed to pay a $375,000 penalty to settle the charges.  The SEC noted Nordion’s cooperation, self-reporting, and remedial acts in assessing the penalty. Gourevitch, a dual Canadian and Israeli citizen, agreed to pay $100,000 in disgorgement, $12,950 in prejudgment interest, and a $66,000 penalty to settle the charges that he violated the anti-bribery, books-and-records, and false records provisions of the FCPA.  The SEC found that Gourevitch facilitated and monitored the consulting contracts between Nordion and the Russian third-party agent, who was Gourevitch’s childhood friend.