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(Bloomberg) -- Becton, Dickinson & Co. has agreed to a $175 million fine over Securities and Exchange Commission claims it repeatedly misled investors about one of its most important products.
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The regulator said Becton Dickinson was aware an infusion pump it manufactured had flaws which would prevent it from obtaining approval by the Food and Drug Administration. It continued to sell the Alaris pump without FDA clearance and without informing investors about the regulatory risk to the device, which represented about 10% of the company’s profits in 2019, according to the SEC.
The SEC also said the device maker materially overstated its operating income in fiscal 2019 by failing to properly account for the costs of fixing the pump’s software flaws. That resulted in the company overstating its operating income by 82% in the fourth quarter of that year, the SEC said.
The company neither admitted to nor denied the findings in the settlement.
As part of the settlement, the company agreed to retain an outside, independent consultant to review its systems for making disclosures.
“Public companies have a fundamental duty to accurately disclose material business risks and should expect to be held accountable when they fall short in that regard, Sanjay Wadhwa, SEC acting director of enforcement, said in a press release.
Becton Dickinson has implemented a number of improvements to its operational and governance processes and related disclosure practices, according to a company statement.
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