By Jenna Greene, From The Litigation Daily

When the Foreign Corrupt Practices Act was passed in 1977, it was designed to combat flagrant bribery of foreign officials by some of the largest companies in the United States.

Almost 40 years later, enforcement of the law by the U.S. Securities and Exchange Commission often feels more like small time, gotcha-style litigation.

Case in point: the SEC’s $12 million settlement on Tuesday with Mead Johnson Nutrition Co. over marketing baby formula to health care professionals in China. It’s a prosecution that makes no sense when compared to the vast sums that drug companies shower on doctors domestically.

The SEC alleged that Mead made improper payments to health care professionals at state-owned hospitals in China to recommend the company’s infant formula to new or expectant mothers.

There are no allegations that there was anything wrong with the product. Mead’s best known brand is Enfamil, which according to the company is the top formula recommended by U.S. pediatricians. It’s not clear from public records whether the formula at issue was Enfamil or another brand.

From 2008 to 2013, the SEC said Mead spent $2 million on the China marketing effort, or $333,000 a year. It wasn’t even a direct expense—rather, Mead provided discounts to its third-party distributors, with the savings allocated for use in marketing and sales.

According to the SEC, distributor salespeople gave Chinese health care professionals cash and other incentives to push the formula, contrary to Mead’s internal policies. The salespeople also encouraged the doctors to collect contact information from new mothers for use in marketing.

So okay, that’s not great. But it seems ludicrous that the SEC went after Mead for it.

Consider how medical products are marketed in the United States. According to a massive investigation by Pro Publica, last year 1,630 companies paid 681,432 U.S. doctors $3.5 billion for consulting, promotional speaking, royalties, meals, gifts and travel.

It’s hard to understand why that’s legal, but rewarding doctors in China to recommend baby formula is not.

As for collecting contact information about new mothers for marketing purposes? Please. I have two kids. I can attest that from the second trimester on, when a deluge of baby related ads and coupons and samples began arriving in the mail, marketers here know all about your reproductive activity too. It may be disturbing, but it’s not a violation of the FCPA.

The key for the SEC is that the Chinese health care professionals work in state-owned hospitals. That makes the doctors “foreign officials” under the act.

If the doctors worked at private, American-style hospitals in China, there would presumably be no violation because they wouldn’t be state actors. And if the doctors worked in the United States, it would be business as usual.

Mead was represented by Gibson, Dunn & Crutcher partners F. Joseph Warin, who chairs the firm’s Washington D.C. litigation practice, and Michael Diamant. Warin did not respond to a request for comment.

Mead did not admit or deny wrongdoing. In a statement, CEO Kasper Jakobsen said the company was “pleased to have reached this final resolution with the SEC. Integrity and compliance with laws and regulations are central to the success of our operations around the world.”

Perhaps the SEC, which brought the suit administratively, could have made its case on technical grounds if it went to trial—to have proven there were payments, that the payments weren’t properly recorded in Mead’s books and records, that the doctors are foreign officials. But the question is, why bring it in the first place?

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