Zimmer Holdings, Inc. Under Investor Investigation Over Potential Foreign Bribery

An investigation on behalf of current long term investors in Zimmer Holdings, Inc. (NYSE:ZMH) in connection with possible violations of the U.S. Foreign Corrupt Practices Act was announced.

Zimmer Holdings, Inc., located in Warsaw, IN, designs, develops, manufactures and markets orthopaedic reconstructive implants, dental implants, spinal implants, trauma products and related surgical products.

According to the investigation by a law firm the investigation on behalf of current long term investors in Zimmer Holdings, Inc. (Public, NYSE:ZMH) stocks focuses on potential violations of the U.S. Foreign Corrupt Practices Act (“FCPA”), which prohibits companies from making improper payments to foreign officials for the purpose of obtaining or keeping business. According to the Justice Department “The Foreign Corrupt Practices Act was enacted for the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business. Specifically, the anti-bribery provisions of the FCPA prohibit the willful use of the mails or any means of instrumentality of interstate commerce corruptly in furtherance of any offer, payment, promise to pay…to a foreign official to influence the foreign official in his or her official capacity … to secure any improper advantage in order to assist in obtaining or retaining business for or with, or directing business to, any person.”

Zimmer Holdings’ revenue went from $3.495billion in 2006, to $3.8975billion in 2007, to $4.1211billion in 2008, and $4.0954billion in 2009.

Nearly a dozen companies have already settled foreign bribery charges with prosecutors in a string of cases that started in 2002. Zimmer Holdings decislosed that In September 2007, the U.S. Securities and Exchange Commission (SEC) informed Zimmer Holdings that it was conducting an investigation regarding potential violations of the Foreign Corrupt Practices Act (FCPA) in the sale of medical devices in a number of foreign countries by companies in the medical device industry. In November 2007, also Zimmer Holdings received a letter from the U.S. Department of Justice (DOJ) requesting that any information provided to the SEC also be provided to the DOJ on a voluntary basis.
Zimmer Holdings said that they continue to provide information and cooperate fully with the SEC and the DOJ. Zimmer Holdings also said that in the course of continuing dialogues with the agencies, it has disclosed information relating to sales of its products by independent distributors in two South American countries.

Shares of Zimmer Holdings, Inc. (ZMH) traded recently at $51.30 per share, down from its52weekHigh of $64.77 per share, $79.18 per share in 2008, and $91 per share in 2007.