Vitamin Firms, Execs Agree To Price-Fixing Guilty Pleas, $33 Mil. Fines
This article was originally published in The Tan Sheet
Executive Summary
German pharmaceutical giant Merck KgaA will pay a $14 mil. criminal fine after agreeing to plead guilty to Justice Department charges that it conspired to fix the price and allocate sales volume of vitamin C from early 1991 to fall 1995, the DoJ announced May 5.
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German pharmaceutical giant Merck KgaA will pay a $14 mil. criminal fine after agreeing to plead guilty to Justice Department charges that it conspired to fix the price and allocate sales volume of vitamin C from early 1991 to fall 1995, the DoJ announced May 5. Three other firms also have agreed to plead guilty and pay criminal fines for their roles in a price-fixing and volume-allocating conspiracy related to vitamin B3. German firm Degussa-Huls AG will pay $13 mil. for its role in the conspiracy from January 1992 to March 1998. Harriman, N.Y.-based Nepera will pay $4 mil. to resolve charges covering the period January 1992 to July 1995. Reilly Industries of Indianapolis was charged with conspiracy from September 1994 to March 1998 and will pay a $2 mil. fine. In addition, two former Nepera execs settled DoJ charges, filed in Dallas federal court, related to their roles in the conspiracy. Former President Roger Noack will serve eight months in prison and pay a $50,000 fine. Former VP Sales & Marketing David Purpi will serve a year and a day in jail and pay a $100,000 fine. In total, 24 prosecutions have resulted from the DoJ Antitrust Division's ongoing investigation into international vitamin price-fixing. Three former BASF execs and a former Hoffman La-Roche official agreed to pleas in April (1 (Also see "BASF, Hoffmann-La Roche Execs Plead Guilty To Vitamin Conspiracy Charges" - Pink Sheet, 10 Apr, 2000.)). In the pending civil litigation, a D.C. federal judge on May 9 rejected defense arguments that the guilty pleas obtained by DoJ, as well as the direct purchasers' class action settlement approved March 29, represent the full breadth of vitamin price-fixing (2 (Also see "Vitamin Price-Fixing $242 Mil. Class Settlement Fund Approved" - Pink Sheet, 3 Apr, 2000.)). "The antitrust statutes expressly recognize that private plaintiffs may allege a conspiracy different in some respects from the conspiracy previously alleged by the government," Judge Thomas Hogan says. The court denied most defense arguments for dismissal, finding the plaintiff vitamin purchasing firms adequately alleged fraudulent concealment and adequately pleaded their claims. Judge Hogan did grant Degussa-Huls' motion to dismiss claims brought by NBTY, Twinlab and Cambr for indirect purchases prior to Dec. 23, 1998, and DuCoa and DCV's motion to dismiss Publix's claims under Florida's Deceptive Trade Practices Act for pre-June 1993 purchases. |