A storage pool for Cobalt-60 isotopes, used in Nordion’s devices that sterilize food and single-use medical products.Daniel Rogall
Medical isotope maker Nordion (Canada) Inc. has agreed to pay a $375,000 (U.S.) penalty to the U.S. Securities and Exchange Commission because its compliance procedures failed to discover that one of its employees was involved in a Russian bribery scheme.
Ottawa-based Nordion, which was sold to a U.S. owner in 2014, reported the scheme to U.S. and Canadian authorities when it was discovered, and co-operated with the SEC, but it was hit with sanctions because of its lax internal controls.
According to a document released by the SEC on Thursday, in 2004 a Nordion engineer named Mikhail Gourevitch, through a friend in Russia, helped the company obtain government approval for a liver cancer treatment called TheraSphere.
Some of the funds paid to the Russian agent were used to bribe Russian officials, the SEC said. Mr. Gourevitch was the contact for the agent, and he hid the cost of the bribes so that Nordion management did not know about them.
Nordion was never actually able to distribute TheraSphere in Russia, even though it paid the agent about $235,000 over six years for consulting work.
The SEC said Nordion's "applicable internal accounting controls were deficient" and it "did not have adequate policies and procedures in place to detect corruption risks." It also gave "little, if any, anti-corruption training to its employees," the commission said.
After discovering the problem, and reporting it to authorities, Nordion hired forensic auditors and revised its policies and controls, the SEC said.
A settlement was reached because of Nordion's self-reporting and co-operation, the SEC said, even though it violated the Exchange Act and the Foreign Corrupt Practices Act.
Nordion is now owned by Sterigenics International LLC, an Illinois-based company.