Streams

Corporations Behaving Badly

Thursday, July 05, 2012

Former Barclays Chief Executive Bob Diamond leaves a Parliament hearing on July 4, 2012 in London, England. (Matthew Lloyd/Getty)

Heidi Moore, Marketplace Wall Street correspondent and New York bureau chief, gives a round-up of GlaxoSmithKline's fraud settlement, JP Morgan's bad investment advice, and Barclay's interest rate manipulation.

Guests:

Heidi Moore

The Morning Brief

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Comments [30]

Eugenia Renskoff from Brooklyn

Hi, Justice for us home borrowers who lost it all.

Jul. 05 2012 06:20 PM
thatgirl from manhattan

amy--in this case, a fine is the same as a setlement. it can be confusing, particularly as one of GSK's specific behaviors amounted to knowingly re-interpreting data from clinical trials. doctors are promoted drugs using data, and usually don't have the time or experience to argue such things, particularly as the data is pulled from its study source and most often used in a promotional rather than scientific context. but yes--GSK admit no wrongdoing--and can admit no wrongdoing.

Jul. 05 2012 11:49 AM
BK from NJ

Off label prescribing by a doctor is NOT illegal. No need to call the sheriff
Off label prescribing by physician specialists often results in new uses and indications for medications. Viagra was originally a drug for pulmonary hypertension. Doctors who were part of the original hypertension studies continued prescribing it after the trials based on the feedback from the men in the trial.
GSK should absolutely be held accountable for off label promotion and were fined appropriately. But to imply the whole physician community is in bed with pharma is crazy. The days of junkets an dinners are also long gone.
Where is the outrage at a company like Massey Energy? The skimped on safety at the Upper Big Branch mine, killed a couple dozen workers, and paid on a $10 million fine?!

Jul. 05 2012 11:45 AM
Amy from Manhattan

fuva: Not only photos of the criminals--also photos of the people hurt by their actions. But regulation?? Why, we can't have that! It would restrict the freedom of job creators!!

thatgirl: Thanks. So they were actually convicted but still maintain their innocence? It was a little confusing, because the description at the top of the page says "settlement."

Jul. 05 2012 11:37 AM
thatgirl from manhattan

amy--off label marketing is illegal, but doctors don't get the idea to prescribe for off-label on their own--they often need white papers and other discussions issued by their colleagues (usually via some benefit of the pharma companies, directly or indirectly) to spread the idea. off-label prescribing is illegal, but the way it's done usually has some relationship to its current use (e.g. depression in those under 18, even when no specific safety study has been conducted or made known to the public for same).

Jul. 05 2012 11:33 AM
RJ from prospect hts.

I was using Welbutrin until the generic became available. My insurance company switched me, which I would be in favor of--until I saw an article in Newsday that said that there were widespread reports of inadequacies with the generic. I spoke to my psychopharmacologist, who switched me back to the name brand--which, ironically, it turned out the insurance company was charging *exactly* the same for. I do not know what has become of these reports since.

Jul. 05 2012 11:32 AM
fuva from harlemworld

Um, the child psychologist caller's response to the question about prescribing adult meds to kids without testing is that...he does it regularly...?

Jul. 05 2012 11:30 AM
Taher from Croton on Hudson

No one from that corporate class will ever go jail. Not here.

Jul. 05 2012 11:30 AM

RE: Richard, the child psychiatrist from Highland Park, NJ --

1. FDA does do some testing
2. So you are prescribing adult drugs for kids, even though they are not approved for kids, because you think the benefits out way the risks? That sounds illegal. It is also unsafe, obviously, and against the spirit of the warning, obviously, "Not to be used by those under 12."

Sheriff's office?

Jul. 05 2012 11:29 AM
Em

What is increasingly annoying me about this discussion regarding Glaxo, is that you are not holding the medical profession accountable. Corporations are craven - yes of course, no surprise there. But they couldn't get away with this if the AMA and doctors in general had acted ethically and responsibly themselves. Doctors are commonly taken on expensive junkets, wined and dined, and given various financial incentives by reps of these companies and they deliberately collude with this. They are not stupid people, they know they are being bought, although many do delude themselves that they are not being influenced. None of this is new. Journalists have been consistently exposing this over the last 10 years but ignored by the MSM. Doctors must be held criminally responsible for this behaviour. It's disgusting.

Jul. 05 2012 11:28 AM
thatgirl from manhattan

amy--it was fine, not a settlement; and no--GSK admitted no wrongdoing.

Jul. 05 2012 11:27 AM
Amy from Manhattan

Just to make sure it's clear, it's legal for doctors to prescribe drugs for "off-label" uses (ones they're not FDA-approved for), but not for drug manufacturers to advertise them for such uses.

Jul. 05 2012 11:27 AM

I agree with holding CEOs and CFOs criminally as well as financially responsible for corporate malfeasance. Fines are definitely too low to change behavior. I disagree with Brian's comment that it's dicey to hold them responsible if they didn't know it was happening or it happened before their tenure. These guys are paid ridiculous amounts of money to hold these positions -- shouldn't that come with some accountability? And we should just take them at their word when they say they were unaware of illegal practices? Really? We allow these guys to side step responsibility by not holding their feet to the fire. And it's not enough to leave it to shareholders -- corporate boards can override them too easily.

Jul. 05 2012 11:27 AM
thatgirl from manhattan

in GSK's case, this off-label marketing will continue apace because of the following: off-label marketing isn't always a boldfaced, put-in-writing thing. pharma uses "key opinion leader" doctors to do their work via their influence on other doctors and best practices for healthcare providing organizations, and their salesforce need only imply certain ideas (like use of paxil being safe for those under 18) for acceptance to spread. the other point is that the FDA is teaming with loads of ex-pharma execs who usher in approvals for companies like GSK, so the influence of corporations on what you'll see on the market, and the way it can be marketed is more often cleared through corporate influence than not. the "revolving door" between regulatory agencies and corporations is well-known, so this won't slow down any time soon.

Jul. 05 2012 11:25 AM
George from Manhattan

Diamonds Are a Banks Worst Friend
First it was Jaime, head honcho at JP Morgan Chase then came Robert, the boss at Barclays. Between them they are responsible for billions of dollars of shenanigans. Both are cut from the right stuff and are brilliant performers but as Robert, who was forced to resign has discovered, and Jamie may also, a 'diamond may not be forever.'

Jul. 05 2012 11:22 AM
fuva from harlemworld

...concisely...

Jul. 05 2012 11:22 AM
Barclays acted under orders from Bank of England from Saving world economy is now punished ?

Barclays acted under orders from Bank of England to
help save the world economy during the crisis by lowering
WORLDWIDE short term interest rates and thereby to help
prevent collapse.

Here's a reference from the BBC :

http://www.bbc.co.uk/news/business-18695181

Many bankers do reckless things that HARM the
world economy for personal gain (they usually
are not punished and walk away rich).

But NOW when Barclays (and probably MANY other
banks) do something under orders from their
central bank (phrased as a diplomatic "suggestion")
to help save the world economy during a crash -
they are nailed to the wall for it.

That just isn't right - and makes one wonder
WHY they are being so selectively and unjustly
prosecuted. Please discuss!

Jul. 05 2012 11:21 AM
Mike from NYC

Now that the supreme court has ruled that the US can only have the best government that money can buy...including the state judiciary where judges are elected...no effective remedy will be implemented, even if 100,000s die from one of these cases.

Jul. 05 2012 11:21 AM
Jessie Henshaw from way uptown

One of the usual things we're not talking about here, is how the economy has become increasingly complex and unmanageable, simple by way of getting bigger and bigger and changing faster and faster, direct physical effects of growth.

Now it matters a lot, maybe before it didn't, but it does now!

Jul. 05 2012 11:20 AM
Amy from Manhattan

The Glaxo settlement wasn't one of those where they didn't admit any wrongdoing, was it? Was there any requirement that they change these practices? Wait, now you're using the word "fine." Was it a fine or a settlement?

Jul. 05 2012 11:19 AM
Mike from NYC

Jail is the only answer: real, hard time in "blue collar" prisons, not some western NY country club with walls setting. Everyone including the CEO and COO who had any responsibility in the chain of command who knew or gave incentives to others to defraud or endanger the public. The fines are of no consequence unless they break the company and require its assets to be sold at auction.

Jul. 05 2012 11:19 AM
MichaelB from Morningside Heights

The guest points out the weaknesses of the regulation and Mr. Sansom's comment is right on -- until there are harsh consequences for the actual individuals, nothing will change.

Jul. 05 2012 11:18 AM
JT from NJ

The companies get greedy? But who are the companies? Individuals comprise companies, so why aren't those INDIVIDUALS being punished? A: Bad behavior hides behind a huge organization that will protect greed at all costs, while citizens who don't have that financial and legal umbrella of protection are harmed. And so it goes.

Jul. 05 2012 11:17 AM
Olivia Koppell from New York

I hope included in this discussion will be the story, that has not been covered nearly enough, about the major American banks colluding in establishing interest rates on the investments of municipalities - leaving many municipalties without the revenue they should have made. This is like "mafia" and cartel behavior. The auctions should have been competitive giving the cities a chance to properly profit on their investments - but they were fixed. This was a story on PRI. These executives are considered patriots and are pillars of their communities. Yet they broke the law and cheated their fellow citizens. They paid a fine - probably thought of as the "cost" of doing business. But they broke the law and yet no one is going to jail, or lost their job. This is a disgrace to say the least and the media should be screaming about this - but they are not. Where are all the people spouting "rule of law" when it comes to immigrants, etc. These companies (and others) have bought off Congress so we can't expect action on these law breakers - only preservation of the status quo that creates huge profits - and thus power and control - for these corporate elites. This undermines our very democracy and why should anyone care about anything anymore!!!

Jul. 05 2012 11:15 AM
fuva from harlemworld

...And then, of course, specific calls for punitive and regulatory action.

Jul. 05 2012 11:14 AM
fuva from harlemworld

Shouldn't there be a better organized response from citizens to these things? What about a parade of shame in D.C., with participants marching with placards containing huge photos of the bad actors and their malfeasance announced (considely) on the podium?

Jul. 05 2012 11:12 AM
Hugh Sansom

We've had over 30 years of governments in the US and Britain (Democratic and Republican in US, Labor and Tory in UK) emphatically telling corporations that they _will not_ be held accountable for profiteering. The whole TARP and bailout package _rewarded_ Wall Street crimes.

Fines are miniscule.

The solution is to hold executives criminally accountable and send them to prison. It's stunning and absurd that a person can go to prison for more time for an ounce of marijuana or for taking a joy-ride in a car than Wall Street executives — combined — ever will for stealing hundreds of billions of dollars and driving the US and Europe into economic collapse.

Health insurers and pharmaceuticals are rewarded in like manner for making people _less_ healthy.

It is a perfect comedy of criminality among corporations (or "people" as Mitt Romney claims).

Jul. 05 2012 11:12 AM
Barclays acted under orders from Bank of England from No good deed goes unpunished???


Barclays acted under orders from Bank of England to
help save the world economy during the crisis by lowering
WORLDWIDE short term interest rates and thereby to help
prevent collapse.

Here's a reference from the BBC :

http://www.bbc.co.uk/news/business-18695181

Many bankers do reckless things that HARM the
world economy for personal gain (they usually
are not punished and walk away rich).

But NOW when Barclays (and probably MANY other
banks) do something under orders from their
central bank (phrased as a diplomatic "suggestion")
to help save the world economy during a crash -
they are nailed to the wall for it.

That just isn't right - and makes one wonder
WHY they are being so selectively and unjustly
prosecuted. Please discuss!

Jul. 05 2012 10:59 AM
Barclays act under orders from Bank of England from (+ to save world economy)


Barclays act under orders from Bank of England to
help save the world economy during crisis by lowering
WORLDWIDE short term interest rates and thereby help
prevent collapse.

Here's a reference from the BBC :

http://www.bbc.co.uk/news/business-18695181

Many bankers do reckless things that HARM the
world economy out for personal gain (they usually
are not punished and walk away rich).

But NOW when Barclays (and probably many other
banks) do something under orders from their
central bank (phrased as a diplomatic "suggestion")
to help save the world economy during a crash
they are nailed to the wall for it.

THat just isn't right - please discuss!

Jul. 05 2012 10:55 AM

some large $$ penalties to be sure -- but has anybody done the cost-benefit analysis as to whether the criminal behavior still made profit, even accounting for the penalties?

Jul. 05 2012 10:50 AM

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