- Business

Johnson & Johnson Stock Price Falls as DOJ and SEC Subpoena Company

Johnson & Johnson has received subpoenas from the Justice Department and SEC following news reports that their baby powder may have contained asbestos.

Last December, some news media reported that Johnson & Johnson talc products were unsafe for use because of the presence of asbestos, a mineral that has been said to cause cancer. Following the reports, the U.S Department of Justice and Securities and Exchange Commission launched an investigation to ascertain the truthfulness of the claim by consumers.

Reacting to the subpoena, Johnson & Johnson stated in a securities filing that it was cooperating with government inquiries and is willing to produce all relevant documents that will aid the investigating agencies in doing their job effectively. In another statement, the company said that the investigations are related to media reports about the numerous lawsuits it faces from consumers who say that their talc products caused cancers.

In a report by the New York Times and Reuters, the cosmetic company was said to have known about the risk of asbestos for many years but chose to keep the information away from the public. So far, Johnson & Johnson has faced about 13,000 lawsuits in which consumers blame their products for causing ovarian cancer.

Some of the lawsuits against the cosmetic company has gotten to the trial stage. While they have prevailed in some of the cases, they have also had to appeal a number of judgments including one in which they were asked to pay $4.7 billion to 22 ovarian cancer patients.

The company has, however, stated that they have maintained high safety standards over the years. “The series of independent tests carried out by regulators and reputable labs has proven that our baby powder is safe and free of asbestos. It cannot cause cancer,” they wrote.

Shortly after the report that asbestos was found in the Johnson & Johnson talc products, their shares fell sharply. In the early trading hours of Thursday, the stock price fell 1.4 percent to $134.43.

The Department of Justice and the Securities Exchange Commission have declined comments on the Subpoenas issued to Johnson & Johnson.

Jed Kim

About Jed Kim

I am working as reporter and guest host for Marketplace. I was a staff reporter for the management industry, risk management, risk-based supervision, capital markets, financial derivatives. Before joining Marketplace in April 2016, I was an environment reporter at KPCC public radio in Pasadena.
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