Mead Johnson to Settle Foreign Corruption Charges

Mead Johnson Nutrition Co. has agreed to pay $12 million to settle charges that employees at its Chinese subsidiary paid people at government-owned hospitals to recommend the company's infant formula.

This was a violation of the Foreign Corrupt Practices Act, according to the Securities and Exchange Commission. Mead Johnson neither admitted or denied the findings, but will pay $7.77 million in disgorgement, $1.26 million in prejudgment interest and a $3 million penalty.

From 2008 to 2013, employees at the subsidiary allegedly paid more than $2 million in cash and other incentives to health-care professionals in Chinese hospitals to recommend Mead Johnson products and to release contact information for expectant mothers who could be directly marketed to, according to the SEC.

A representative for the company said it is pleased to "have reached this final resolution."

This month, the Illinois-based nutrition company said revenue slid 7% in the second quarter as the strong U.S. dollar affected sales overseas and the company stumbled in China.

Shares recently rose 0.6% and have declined more than 10% so far this year.

Write to Angela Chen at [e-mail]

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