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Grifols discloses probes in multiple countries

Spanish pharma Grifols S.A described ongoing corruption investigations across Europe and in South America and Asia in a recent SEC filing.

Some of the investigations relate to sales practices by Talecris Biotherapeutics. Grifols bought the company in 2010 for $3.4 billion.

Talecris, based in North Carolina, was formed in 2005 when private equity firms Cerberus and Ampersand Ventures paid $450 million for the blood-plasma unit of German drug company Bayer.

In late 2012, Grifols said the DOJ issued an “official declination to all inquiries related to the possible violation of the Foreign Corrupt Practices Act (FCPA) that were underway since July 2009.”

Grifols said the DOJ mentioned “the significant cooperation of Grifols . . . to secure valuable information and making responsible decisions that [led] to the early disclosure of information to the DOJ.”

The company also took remedial action and strengthened its compliance program, it said in 2012.

Here’s Grifols’ disclosure from its latest Form 6-A (report of foreign private issuer):


The Group is carrying out an internal investigation, already started prior to the acquisition of Talecris, in relation to possible breaches of the Foreign Corrupt Practices Act (FCPA) of which Talecris was aware in the context of a review unrelated to this matter. This FCPA investigation is being carried out by an external legal advisor. In principle, the investigation has been focused on sales to certain Central and Eastern European countries, specifically Belarus and Russia, although trading practices in Brazil, China, Georgia, Iran and Turkey are also being investigated, in addition to other countries considered necessary.
In July 2009, the Talecris Group voluntarily contacted the U.S. Department of Justice (DOJ) to inform them of an internal investigation that the Group was carrying out regarding possible breaches of the FCPA in certain sales to certain central and East European countries and to offer the Group’s collaboration in any investigation that the DOJ wanted to carry out. As a result of this investigation the Group suspended shipments to some of these countries. In certain cases, the Group had safeguards in place which led to terminating collaboration with consultants and suspending or terminating relations with distributors in those countries under investigation as circumstances warranted.
As a consequence of the investigation, the agreement with Talecris’ Turkish distributor was terminated and a settlement agreement has been reached between the parties.
In November 2012, the Group was notified by the DOJ that the proceedings would be closed, without prejudice to the fact that they could be re-opened in the future should new information arise. The Group continues with the in-depth review of potential irregular practices.
Furthermore an investigation has been opened in Italy, in relation with the criminal prosecution in Naples against 5 employees of the Company, including the former General Manager. The Company and its legal advisors consider this investigation will be limited to the individual employees and the likelihood is remote this issue will affect the Company.
The legal advisors recommend limiting disclosure of the aforementioned information in these condensed consolidated interim financial statements, because the matter is currently under legal dispute.


Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

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