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The government awards contracts to companies with histories of misconduct such as contract fraud and environmental, ethics, and labor violations. In the absence of a centralized federal database listing instances of misconduct, the Project On Government Oversight (POGO) is providing such data. We believe that it will lead to improved contracting decisions and public access to information about how the government spends hundreds of billions of taxpayer money each year on goods and services. Report an instance of misconduct »

Cardinal Health, Inc.

Inadequate Accounting Practices

Date: 07/26/2007 (Date of Announcement)

Misconduct Type: Securities

Enforcement Agency: SEC

Contracting Party: None

Court Type: Administrative

Amount: $35,000,000

Disposition: Settlement

Synopsis: In October 2003, the Securities and Exchange Commission (SEC) began investigating how Cardinal Health accounted for expected settlements of lawsuits against vitamin manufacturers. The following year, the probe expanded to include Cardinal’s method of classifying its drug-distribution business revenue. As the result of an internal investigation, Cardinal restated its annual and quarterly financial statements for three years. The SEC alleged that, from September 2000 through March 2004, Cardinal engaged in a fraudulent revenue and earnings management scheme, as well as other improper accounting and disclosure practices. In January 2006, Cardinal reached a settlement with the SEC and agreed to pay a $35 million penalty.