SEC Enforcement Action Against the Former Chairman of Syncor International Corp.
In September 2007, the SEC filed a settled civil action against Monty Fu, a U.S. resident and former chairman and chief executive officer of Syncor International Corp. (Syncor), in connection with improper payments made between 1985 and 2002 by Syncor’s subsidiary in Taiwan (Syncor Taiwan) to physicians employed by state-owned or state-controlled hospitals. The SEC alleged that Fu was aware Syncor Taiwan was making improper payments to the physicians and he was cautioned by Syncor’s management that the company could not make payments for the purpose of influencing the physician’s decisions to purchase or use Syncor’s products and services. Nevertheless, the SEC found Fu, who at all times had authority to implement a system of internal controls at Syncor Taiwan to ensure that transactions were fairly recorded, failed to maintain compliance with existing company internal controls and failed to implement additional internal controls to determine whether payments by Syncor Taiwan complied with company policy and the FCPA. Based on this conduct, Fu consented to the entry of a final judgment ordering him to pay a $75,000 civil penalty. In December 2002, Syncor Taiwan settled a DOJ enforcement action concerning the improper payments by paying a $2 million criminal fine and Syncor settled an SEC enforcement action concerning the improper payments made not only by Syncor Taiwan, but also certain other foreign subsidiaries by paying a $500,000 civil penalty.