Cardinal Health, a medical products and services company based in Dublin, Ohio, announced it has reached a final agreement to pay $35 million in penalties to the Securities and Exchange Commission to settle a lawsuit that accused the company of engaging in fraudulent accounting practices between 2000 and 2004.
"Without admitting or denying the allegations of the Commission's complaint, Cardinal agreed to be permanently enjoined from violating the anti-fraud, reporting, record-keeping and internal controls provisions of the federal securities laws," the settlement said.
According to the lawsuit filed in 2004, Cardinal misclassified and inflated certain earnings in an effort to present a false financial picture to investors. The agreement brings Cardinal one step closer to settling the accounting scandal that also triggered a $600 million settlement with investors who sued the company, and an anticipated $40 million lawsuit settlement with employees who bought Cardinal stock for their retirement portfolios. In May, Cardinal officials set aside a $40 million reserve in hopes of reaching a settlement with workers.
In addition to paying $35 million in penalties, the SEC agreement also will require Cardinal to retain an independent consultant to review its financial disclosure processes, practices and control, according to an SEC news release. The agreement is still subject to court review. -- by Shawn Rhea
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