A major medical device company has settled charges that it misled investors about potential risks associated with one of its leading products.
The company, Becton, Dickinson and Company (BD), agreed to pay the U.S. Securities and Exchange Commission (SEC) a $175 million civil penalty to settle charges that it violated security laws in connection with its continued misrepresentation of the safety of its Alaris infusion pump, a device that constituted 10% of the company’s total operating income during 2019 and 2020. In addition, the company agreed to retain an independent compliance consultant to reduce the risk of future such occurrences.
In brief, BD allegedly failed to obtain updated regulatory clearance from the FDA that addressed modifications to its infusion pump model and also significant software issues that posed known safety risks to patients. Concurrently, the company allegedly “materially misled investors by failing to make required disclosures about the increased risk” associated with the use of the pump and the likelihood that the FDA would prohibit future sales of the product.
The SEC investigation determined that BD “violated antifraud, reporting, internal accounting controls, books and records, and disclosure controls provisions of the federal securities laws.” These charges led the SEC to propose the $175 million civil penalty levied against the company.
An article detailing Becton, Dickinson and Company’s settlement with the SEC is available at https://www.jdsupra.com/legalnews/medical-device-company-settles-fraud-4656708/.
