US Imposes $18Mln Penalty on Baxter International Company - Securities Commission

WASHINGTON (Pakistan Point News / Sputnik - 23rd February, 2022) The US Securities and Exchange Commission (SEC) said in a press release that it has imposed an $18 million penalty and settled charges against the multinational health care company Baxter International for improper intra-company foreign exchange transactions that resulted in the misstatement of the company's net income.

"The SEC's order against Baxter finds that the company violated the negligence-based anti-fraud, reporting, books and records and internal accounting controls provisions of the Federal securities laws," the release said on Thursday. "From at least 1995 to 2019, Baxter used a convention to convert non-US Dollar denominated transactions and assets and liabilities on its financial statements that was not in accordance with... generally accepted accounting principles."

The SEC said in the release that beginning in 2009, the company exploited the convention to enter into intra-company foreign exchange transactions for the sole purpose of generating foreign exchange accounting gains or avoiding foreign exchange accounting losses.

The SEC also announced it settled charges against Baxter's former treasurer and assistant treasurer, Scott Bohaboy and Jeffrey Schaible, respectively, for their misconduct related to these transactions.

Baxter as well as Bohaboy and Schaible did not admit or deny the SEC's findings, but agreed to cease and desist from future violations, the release said.

Bohaboy agreed to pay a civil penalty of $125,000 and Schaible agreed to pay a civil penalty of $100,000, repay $76,404 and a also pay a prejudgment interest of $12,955, the release added.

The settlement creates a fair fund for distribution of settlement proceeds to investor harmed by Baxter's activities, according to the release.