NEW YORK, July 11 (UPI) -- The Financial Times said Thursday that drug giant Bristol-Myers Squibb Co. is being investigated by U.S. regulators for allegedly inflating sales by $1 billion last year.
Bristol-Myers Squibb, which is one of the world's largest pharmaceuticals companies, met with the Securities and Exchange Commission to discuss sales to drug wholesalers that boosted inventories, the newspaper reported.
The report added there was no suggestion at this time that the company had acted improperly or there had been a deliberate attempt to inflate sales figures.
The investigation is the latest to be launched by the SEC as it widens its attack on the financial practices of corporate America.
On Wednesday a criminal investigation was launched into Denver-based Qwest Communications International Inc., which is already under investigation for its accounting practices.
Qwest said federal prosecutors launched their own criminal probe into the company. The nation's fourth largest local phone company said the U.S. attorney's office in Denver notified it of the probe but did not explain its scope.
The SEC, the White House, Congress and business leaders are all attempting to restore investor confidence in corporate America's financial statements following a series of scandals at Enron, WorldCom Inc. and Global Crossing Ltd.
Qwest's announcement put a further dent in the telecommunications sector's credibility after WorldCom Inc.'s $3.85 billion accounting scandal surfaced in late June.
Meanwhile, Moody's Investors Service and Fitch Ratings responded to the Qwest news by cutting the phone company's senior unsecured debt ratings and warned they could be downgraded further.
The rating companies said the probe may hurt the company's ability to attract and retain customers, as well as its efforts to quickly sell several assets.
A third agency, Standard & Poor's, said it would keep its current ratings on the embattled telecommunications company but may cut them.
The probe will limit Qwest's financial flexibility as it struggles to sell assets to help pay down its massive debt, Fitch and Moody's said.
Moody's Investors Service downgraded the company three notches deeper into junk territory to B2 from Ba2. Fitch Ratings cut Qwest's rating to B from BBB-minus and said it could cut further.
"While Qwest has no additional information on the investigation or its impact on the asset sales, Fitch believes that the criminal investigation coupled with ongoing SEC investigations will significantly diminish the company's ability to sell assets in the time frame previously contemplated," Fitch said.
Qwest had been in the midst of evaluating bids for the proposed sale of its directory and wireless businesses.
"Moody's is concerned about possible adverse consequences on the company's near-term liquidity should asset sales or planned accounts receivable securitizations suffer any setbacks resulting from today's announcement," Moody's said.
