The Securities and Exchange Commission on Monday said that Bristol-Myers Squibb agreed to pay more than $14 million to settle SEC charges that the New York City-based company violated the Foreign Corrupt Practices Act and reaped more than $11 million in profits from its misconduct in China.

Between 2009 and 2014, sales representatives at BMS China, Bristol-Myers Squibb’s majority-owned joint venture in China, bribed Chinese health-care providers with cash, jewelry, and other gifts, and then inaccurately recorded the spending as legitimate business expenses, which were then consolidated into Bristol-Myers Squibb’s books.

The SEC charged that Bristol-Myers Squibb failed to respond effectively to red flags indicating possible bribes. The company also failed to investigate claims by certain terminated employees of BMS China that fake invoices, receipts, and purchase orders were widely used to fund improper payments to health-care providers.

Bristol-Myers Squibb was also slow to remediate gaps in internal controls over interactions with health-care providers and to monitor potential inappropriate payments to them that were identified repeatedly in annual internal audits of BMS China between 2009 and 2013, the SEC charged.

“Bristol-Myers Squibb’s failure to institute an effective internal controls system and to respond promptly to indications of significant compliance gaps at its Chinese joint venture enabled a widespread practice of providing corrupt inducements in exchange for prescription sales to continue for years,” Kara Brockmeyer, chief of the SEC enforcement division’s FCPA unit, said in a press release.

Without admitting or denying the findings, Bristol-Myers Squibb consented to the order and agreed to return $11.4 million of profits plus prejudgment interest of $500,000 and pay a civil penalty of $2.75 million.  Bristol-Myers Squibb also agreed to report to the SEC for a two-year period on the status of its remediation and implementation of FCPA and anti-corruption compliance measures.

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