History of Bristol-Myers Squibb:

Bristol-Myers Squibb (NYSE: BMY), often referred to as BMS, is a pharmaceutical

company, headquartered in New York City. The company was formed in 1989, following
the merger of its predecessors Bristol-Myers and the Squibb Corporation. Squibb was
founded in 1858 by Edward Robinson Squibb in Brooklyn, New York, while Bristol-
Myers was founded in 1887 by William McLaren Bristol and John Ripley Myers in
Clinton, New York (both were graduates of Hamilton College).

Lamberto Andreotti became the company's CEO on May 4, 2010. Former CEO James M.
Cornelius remains chairman of the Board of Directors.

Bristol-Myers Squibb manufactures prescription pharmaceuticals in several therapeutic

areas, including cancer, HIV/AIDS, cardiovascular disease, diabetes, hepatitis,
rheumatoid arthritis and psychiatric disorders. Its mission is to "discover, develop and
deliver innovative medicines that help patients prevail over serious diseases." Over the
past several years BMS had been upping the price of its medicines to bolster profits.

BMS' primary R&D sites are located in Princeton, New Jersey (formerly Squibb) and
Wallingford, Connecticut (formerly Bristol-Myers), with other sites in Hopewell and
New Brunswick, New Jersey, and in Braine-l'Alleud, Belgium, and Tokyo.

A major restructuring involves focusing on the pharmaceutical business and biologic

products along with productivity initiatives and cost-cutting and streamlining business
operations through a multi-year program of on-going layoffs. As another cost-cutting
measure Bristol-Myers also reduced subsidies for health-care to retirees and plans to
freeze their pension plan at the end of 2009.

In November 2009, Bristol-Myers Squibb announced that it was "splitting off" Mead
Johnson Nutrition by offering BMY shareholders the opportunity to exchange their
stock for shares in Mead Johnson. According to Bristol-Myers Squibb, this move is
expected to further sharpen the company's focus on biopharmaceuticals.
In August 2009, BMS acquired the biotechnology firm Medarex as part of the company's
"String of Pearls" strategy of alliances, partnerships and acquisitions. In October 2010,
the company acquired ZymoGenetics, securing an existing product as well as pipeline
assets in hepatitis C, cancer and other therapeutic areas.

Achievement&Awards :

In 1999, President Clinton awarded Bristol-Myers Squibb the National Medal of

Technology, the nation's highest recognition for technological achievement, "for
extending and enhancing human life through innovative pharmaceutical research and
development and for redefining the science of clinical study through groundbreaking
and hugely complex clinical trials that are recognized models in the industry." In 2005,
BMS was among 53 entities that contributed the maximum of $250,000 to the second
inauguration of President George W. Bush.[3]

BMS is a Fortune 500 Company . Newsweek's 2009 Green Ranking recognized Bristol-
Myers Squibb as 8th among 500 of the largest U.S. corporations. Also, BMS was
included in the 2009 Dow Jones Sustainability North America Index of leading
sustainability-driven companies.

Scandals and allegations

The company was involved in an accounting scandal in 2002 that resulted in a

significant restatement of revenues from 1999–2001. The restatement was the result of
an improper booking of sales related to "channel stuffing," or the practice of offering
excess inventory to customers to create higher sales numbers. The company has since
settled with the United States Department of Justice and Securities and Exchange
Commission, agreeing to pay $150 million while neither admitting nor denying guilt. [7]

According to an FTC consent order filed in 2003, the company

 engaged in a series of anticompetitive acts over the past decade to obstruct the
entry of low-price generic competition for three of Bristol's widely-used
pharmaceutical products: two anti-cancer drugs, Taxol and Platinol, and the
anti-anxiety agent BuSpar. Bristol avoided competition by abusing federal
regulations to block generic entry; deceived the U.S. Patent and Trademark
Office (PTO) to obtain unwarranted patent protection; paid a would-be generic
rival over $70 million not to bring any competing products to market; and filed
baseless patent infringement lawsuits to deter entry by generics.

The company has also been sued in this matter by state attorneys general to recover
monetary damages.

As part of a Deferred Prosecution Agreement, the company was placed under the
oversight of a monitor appointed by the U.S. Attorney in New Jersey. In addition, the
former head of the Pharma group, Richard Lane, and the ex-CFO, Fred Schiff, were
indicted for federal securities violations.

An investigation of the company was made public in July 2006, and the FBI raided the
company's corporate offices. The investigation centered around the distribution of
Plavix and charges of collusion.[9]

On September 12, 2006, the monitor, former Federal Judge Frederick B. Lacey, urged
the company to remove then CEO Peter Dolan over the Plavix dispute. Later that day,
BMS announced that Dolan would indeed step down.[10]

In November 2001, BMS spend one billion U.S. dollars, the market price (70 U.S.
dollars / share) due to cloning Biotechnology Company purchased 19.9% of the
outstanding shares, and according to equity method reflects the investment due to
cloning. But by the end of 2001 due to cloning the company's financial scandal, its stock
price from the highest point of the 70 U.S. dollars fell to less than 10 U.S. dollars. Under
CEO Jim Cornelius, who was CEO following Dolan until May 2010, all executives
involved in the "channel-stuffing" and generic competition scandals have since left the
company.
        2, BMS financial manipulations Perspective
        1, 'packing distribution channels' (channel-stuff-ing), overdraft sales
        the use of 'packing distribution channels' Marketing tactics to increase sales
revenue surprise is the main BMS to use the financial manipulations. 'Packing
distribution channels' is a way to future periods 'advance' income vicious promotions,
the seller to the buyer through the provision of commercial incentives to the buyer
purchases in advance, which in the short term to achieve significant improvements in
sales and beautify financial performance.
        In the U.S., pharmaceutical companies, the majority of drugs are sold through
distribution network. The write-offs are often meager profits of drug distributors are
trying to force those prices increases the potential accumulation of drugs. Once the
message within the distribution channel implies a certain drug prices may rise, they will
be an additional inventory of these drugs. Because of this, pharmaceutical companies
gloss over the short-term gains, you can suggest other means (for example, the drug
price increase Information to the distributors) to induce distributors to buy more drugs.
According to Industry practice, pharmaceutical companies often will monitor inventory
levels of distributors, and distributors’ excess inventory situation, to take to the
distributor to issue a warning by deposit obligations. In recent years, 'filling distribution
channels' benefits pharmaceutical companies often forget their obligations, leading
distributors of overstock, filling the distribution channels. This kind of irresponsible
promotions acts not only as a distributor abhorrence, and often investors mistakenly
believe that drug demand, thereby making the wrong Investment decisions.
What happened in corporate accounting scandals were misdemeanors committed by
corporate executives of large companies. They either do not report liabilities, understate
expenses, overstate revenue, misuse funds or connive with other officials of other
businesses or affiliates to perpetuate their fraudulent schemes. What happened in
corporate accounting scandals were considered as crime by the investors and by the
government since these are also called economic sabotages? The bottom line of what
happened in corporate accounting scandals are loss of money and loss of jobs both for
the investors and their employees. Hence, the government is trying its best to avoid the
recurrence of what happened in corporate accounting scandals as way of bringing back
their faith businesses.   
Here are some of the details as to what happened in corporate
accounting scandals:

October 2001/Enron- Income was increased and debts over $1 billion were taken out of
the books through the use of a partnership firm. The liability was recorded in the books
of the partnership instead of Enron. A former Enron executive pleaded guilty to two
criminal acts filed against him. Enron filed for bankruptcy and its external auditor
Arthur Andersen was found guilty of obstruction of justice for the act of destroying
important documents of Enron.

November 2001/Arthur Andersen- Important documents were related to SEC

investigation on Enron were shredded. Andersen was duly charged and convicted for
impediment of justice resulting to closure of the auditing firm.

March 2002/WorldCom- Expenses aggregating $3.8billion were capitalized and its

founder was given a $400 million loan that was not recorded in the books of accounts.
Two former executives, the CFO and Controller, were criminally charged and arrested.
This is what happened in corporate accounting scandals involving WorldCom.

April 2002/Adelphia Communications- Allegations included $3.1 billion of family loans

duly guaranteed by the business. Also, capital was inflated and expenses hidden.
Executives and three Rigas family were arrested for deception. Moreover, the company
filed a case for the whole Rigas family.

July 2002/AOL Time Warner- What happened in corporate accounting scandals

involving AOL Time Warner resulted to overstatement of sales by $49 million. A $54
billion suit was filed against the company.

July 2002/Bristol-Myers Squibb- What happened in corporate accounting scandals

concerning Bristol-Myers Squibb? Their 2001 sales were inflated by $1.5 billion by
unloading medical products wholesalers who did not have capacity to sell just to bloat
their sales figures. The company has been fully cooperating with SEC inquiries into the
matter. If the inventory stock will be retrieved from the wholesalers, there will be a
corresponding reduction in the earnings per share by as much as 61 cents on the
company’s financial statements
Bristol-Myers settles conspiracy charge:

NEWARK, N.J. – Bristol-Myers Squibb Co. agreed to pay $300 million in a deal to defer
federal prosecution of a conspiracy charge stemming from an accounting scandal. Two
of its former executives also were indicted for their alleged roles in the same scandal.

Frederick Schiff, Bristol-Myers former chief financial officer, and Richard Lane, former
executive vice president and president of the company's worldwide medicines group,
were indicted on charges of conspiracy and securities fraud.

The company said it would record an additional reserve of $249 million in the second
quarter related to the settlement. Its shares fell 26 cents to close at $25.20 in trading on
the New York Stock Exchange, near the high end of the 52-week range of $22.22 to
$26.60.

Bristol-Myers has doled out about $800 million to settle lawsuits and investigations
tied to the incentives it paid wholesalers to stockpile inventory, inflating sales and
earnings. In March 2003, Bristol-Myers restated $900 million in profits and $2.5 billion
in revenue reported from 1999 through the first half of 2002.

"This is a case where Bristol-Myers Squibb failed to disclose relevant information to its
shareholders that would have affected its stock price.

The company also agreed to have former federal judge Frederick B. Lacey act as an
independent monitor of its accounting practices and financial controls. He is already
working with the company under a previous agreement with the U.S. Securities and
Exchange Commission.

Bristol-Myers reached the deal under what is called a deferred prosecution. Under such
arrangements, prosecution is delayed and will be dropped if certain terms are met.
Bristol-Myers' prosecution will be dropped after two years if it meets standards, such as
retaining Lacey, appointing an additional director, introducing more financial controls,
and cooperating with the investigation.

As part of the agreement, the company "accepts and acknowledges responsibility" for
the scheme, called "channel stuffing," in which drug wholesalers are given incentives to
purchase large amounts of product to make it appear that demand is high.

"BMS promoted a corporate culture in which meeting or exceeding company budget

targets and the consensus (Wall Street) estimates was considered mandatory. Achieving
these goals was known as 'making the numbers' or 'hitting the numbers,' ”according to a
statement of facts in the deferred prosecution agreement.

In a statement, Dolan said he was "very pleased" to have an agreement with the U.S.
attorney.

"We are determined that the mistakes of the past not be repeated and that the
company's reputation for adhering to the highest standards for ethical business
practices be fully restored," he said.

Christie called Schiff the company's "chief concealment officer" and said that Lane was
"a cheat." If found guilty, the two face up to 10 years in prison and $1 million in fines.

The former executives were charged with instructing staff to create the incentive
packages to inflate sales and profit figures, while misleading Wall Street analysts and
investors about those measures.

They "brushed aside and ignored concerns expressed by BMS employees about the use
of financial incentives to the wholesalers, the costs BMS was incurring from the sales
incentives to the wholesalers, and the build-up in excess inventory at the wholesalers,"
according to the indictment.