A grand jury in Massachusetts is seeking documents from Boston Scientific in connection with a criminal investigation into sales group practices within its Cardiac Rhythm Management division.
"We received a subpoena from the U.S. Attorney's Office for the District of Massachusetts seeking documents relating to the former Market Development Sales Organization that operated within our CRM business," the company discloses in an SEC filing. "We are cooperating with the request." The company received the subpoena March 22--one week after the company said it had stopped shipment and started recalling all of its implantable cardioverter defibrillators and cardiac resynchronization therapy defibrillators that have not yet been implanted because it hadn't got approval from federal regulators for changes to its manufacturing processes, the Boston Globe points out.
It is unclear whether the grand jury's investigation is related to the recall, or if its focus is on sales operations in Massachusetts or elsewhere. The company has declined to comment beyond the regulatory filing.
Boston Scientific has faced a number of challenges as of late. The company's stock has lost about 75 percent of its value in recent years because of a series of missteps and setbacks, including problems integrating Minnesota devicemaker Guidant, which Boston Scientific purchased for $28.4 billion in 2006. "That may go down for me as one of the worst acquisitions in the history of the world,'' David Wald, a medical device analyst at the Noble Financial Group investment bank, says, as quoted by the Globe.
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