Special Committee of Johnson & Johnson’s Board of Directors Concludes its Investigation of Alleged Wrongdoing by Company Executives—Including Executives of its DePuy Orthopeadics Unit
Following claims brought by the company’s shareholders alleging that J&J’s officers and directors breached their fiduciary duties owed to the company by permitting a variety of improper activities to occur across various business units, including J&J’s DePuy Orthopeadics unit, the Board of Directors appointed a “Special Committee” to review and investigate the allegations. In late June of 2011, the Special Committee presented an extensive report detailing the scope of the investigation, its findings and conclusions, and made recommendations to J&J’s Board of Directors. On July 18, 2011, the Board met and unanimously adopted the recommendations set forth in the report. The 127 page report was then made public.
The report provides detailed information regarding alleged wrong-doing at J&J, recommends the creation of a new Regulatory and Compliance Committee and concludes that “no officer – with the possible exception of one former J&J officer and the one former DePuy, Inc. officer” breached any fiduciary duty owed to Johnson & Johnson.
There is an entire section of the report discussing allegations that DePuy entered into contractual arrangements with various orthopedic surgeons, which were designed to induce the use and purchase of DePuy’s hip and knee reconstruction and replacement products. As part of a civil and administrative settlement of these claims, DePuy agreed to pay $84.7 million in fines. We are carefully reviewing this report and will provide more detailed information regarding the federal investigation of DePuy and the orthopeadic industry in the coming days. Stay tuned…