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Economy Briefs: Teva Pharma discloses bribery investigation

- - Monday, August 6, 2012

SEC

NEW YORK — Teva Pharmaceutical, the largest generic drug company in the world, said it is the target of a federal bribery investigation into its business in Latin America.

Teva said the Securities and Exchange Commission has subpoenaed documents and is looking into its compliance with the Foreign Corrupt Practices Act, which makes it illegal for people or companies to make payments to officials of foreign governments in order to get or keep business.

The Israeli company disclosed the inquiry in a form filed with the Securities and Exchange Commission last week. Teva said it was notified of the investigation July 9 and that the probe is in its early stages. Teva added that it is conducting its own voluntary investigation.

Enforcement of the Foreign Corrupt Practices Act, or FCPA, has picked up in recent years. In 2009 and 2010, more than 50 individuals were charged with violating the law, and the government collected almost $2 billion in criminal fines, according to the Justice Department. Wal-Mart Stores Inc. is being investigated for FCPA violations after the New York Times reported in late April that its Mexican unit allegedly paid millions of dollars in bribes to speed building permits and gain other favors. The Times also reported that company executives didn't notify authorities even after Wal-Mart found evidence of the scheme during a probe dating to 2005.

Teva Pharmaceutical Industries Ltd. said Thursday its second-quarter revenue grew 19 percent to $5 billion. Sales in the U.S. grew nearly 50 percent after Teva began selling generic versions of the psychiatric drugs Seroquel and Zyprexa. Its revenue also got a boost from Teva's acquisition of drug maker Cephalon in October. Teva's other products include Copaxone, the biggest-selling multiple sclerosis medication in the world.

The company reported more than $18 billion in revenue in 2011.

AUTO

Spyker sues GM overfailed Saab takeover

AMSTERDAM — Spyker Cars NV, the tiny Dutch company that bought Swedish carmaker Saab from General Motors Co. for $74 million in 2010, said Monday it is suing GM for $3 billion in damages.

Spyker, along with its now-bankrupt former Saab subsidiary, alleges that GM unfairly blocked deals that would have seen a Chinese manufacturer take over Saab production and save it from bankruptcy. It says GM feared competing with Saab in China.

"We owe it to our stakeholders and ourselves that justice is done," said Spyker CEO Victer Muller. "We tirelessly worked to save Saab Automobile until GM destroyed those efforts and deliberately drove Saab Automobile into bankruptcy."

He told reporters during a conference call that the suit filed with the United States District Court of the Eastern District of Michigan could drag on for "years."

GM could not immediately be reached for comment. Business law professor Anthony Sabino of St. John's University said that at first glance, Spyker's suit was a long shot.

Saab's financial situation continued to deteriorate under Spyker's ownership as consumers worried about buying cars from a maker that appeared likely to be out of business soon. The Swedish company eventually went bankrupt in late 2011. It is now being bought out of bankruptcy by National Electric Vehicle Sweden AB.

FEDERAL RESERVE

Survey: Tighter U.S. loan standards for Europe banks

A Federal Reserve survey finds that more than half of U.S. banks that lend to European banks continue to tighten their credit standards. That reflects the U.S. banks' concern over the deepening European debt crisis.

Of the 22 U.S. banks surveyed that make loans to European banks, one said it had tightened its standards "considerably" for such loans in the second quarter. Another 13 banks, or 59 percent, said they had pulled in the lending reins "somewhat" during the April-June period, according to the survey released Monday.

The debt crisis gripping the 17 countries that use the euro has pushed much of the region into a recession. Many European banks are heavily exposed to government debt, making them a greater risk.

U.S. banks generally eased standards for loans to businesses.

• From wire dispatches and staff reports