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Pharmaceutical Giant Sanofi Under Investigation for Possible Violations of ERISA

March 24, 2015 In The News

On the heels of its agreement to pay $109 million to settle claims that it provided illegal “kickbacks” to doctors in exchange for prescribing and selling an arthritis medication, Sanofi is facing yet another allegation of violating federal “anti-kickback” laws. This time, a whistleblower lawsuit alleges that the pharmaceutical giant’s CEO and other top executives paid tens of millions of dollars to induce hospitals, doctors and pharmacies to promote the company’s diabetes drugs.

Following initiation of the whistleblower litigation, Zamansky LLC announced that it was undertaking an investigation into possible ERISA violations arising out of the alleged “kickback” scheme.

New Allegations Come to Light

On Friday, December 3, 2014, Diane Ponte, a former paralegal with Sanofi who was fired in September, filed a lawsuit in New Jersey Superior Court alleging that her termination was retaliation for disclosing the alleged “kickbacks.”

According to Ms. Ponte’s complaint, Sanofi used contracts with consulting firms to provide improper financial incentives in exchange for getting its diabetes drugs on the market. She alleges that the company’s CEO, Christopher Viehbacher, and the vice president of its diabetes division were both complicit in the scheme.

Mr. Viehbacher was ousted following the Sanofi Board’s announcement of an internal investigation into the matter, and the vice president, Dennis Urbaniak, was allowed to retire. Mr. Urbaniak subsequently took a position with one of the consulting firms that had allegedly helped facilitate the unlawful incentives.

The lawsuit asserts that the “kickback” scheme went on for years. The former CEO has stated that Ms. Ponte’s claims “are entirely baseless and are categorically false.” Sanofi claims that she is “opportunistically attacking [the] company.”

Zamansky LLC’s Investigation into a Potential Class Action for U.S. Group Savings Plan Participants

Zamansky LLC has announced that it is launching an investigation into possible ERISA violations arising out of Sanofi’s failure to disclose the alleged “kickbacks” in a timely manner. Under the Employee Retirement Income Security Act (ERISA), companies offering employees retirement plans are required to offer prudent investments to plan participant and provide fiduciary oversight over the investment options.

Sanofi has long provided a U.S. Group Savings Plan to its employees. Participating employees’ funds may invest in the company’s stock. After the announcement that the company’s CEO had been terminated, Sanofi’s stock price fell by almost 20 percent – from $56 to less than $45 per share. If the plan fiduciaries allowed the plan to invest in the company’s stock after learning of the alleged “kickbacks,” they may be liable for violations under ERISA.

Zamansky LLC intends to investigate the matter fully. If the allegations are true, participating employees who lost money in the U.S. Group Savings Plan may be able to file a class action lawsuit to recover their losses.

Contact Zamansky LLC

If you are a current or former employee who invested in Sanofi’s U.S. Group Savings Plan after December 19, 2012, contact us as soon as possible. You may be able to assist in our investigation. To reach us, call (212) 742-1414 or submit our online form today.