8-KOther Events

FEDEX CORP 8-K Report, Corporate Update (Jul 18, 2014)

Filed July 18, 2014For Securities:FDX

Summary

This 8-K filing from FedEx Corporation (FDX), dated July 17, 2014, announces a significant development in a previously disclosed criminal investigation by the U.S. Department of Justice (DOJ). The DOJ has filed a criminal indictment against FedEx Corporation, FedEx Express, and FedEx Services in the Northern District of California concerning the transportation of packages for online pharmacies suspected of illegally shipping pharmaceuticals and controlled substances. The indictment alleges conspiracy to unlawfully distribute controlled substances and misbranded drugs. FedEx maintains its belief that its employees have acted in good faith and that the company has not engaged in illegal activities. The company intends to vigorously defend itself against these charges. While the proceedings are in their early stages, FedEx acknowledges that potential remedies upon conviction could include substantial fines, penalties, forfeiture, and compliance conditions, with the possibility of material financial impact.

Key Highlights

  • 1FedEx Corporation, FedEx Express, and FedEx Services have been indicted by the U.S. Department of Justice (DOJ) in California.
  • 2The indictment stems from a criminal investigation into the transportation of packages for online pharmacies.
  • 3Allegations include conspiracy to unlawfully distribute controlled substances and misbranded drugs.
  • 4FedEx denies engaging in illegal activities and asserts that its employees acted in good faith.
  • 5The company plans to vigorously defend itself against the charges.
  • 6Potential consequences of a conviction include fines, penalties, forfeiture, and compliance conditions.
  • 7FedEx acknowledges that a conviction could result in material financial impact, but cannot estimate the range of loss at this early stage.

Frequently Asked Questions

This 8-K filing is to report that the U.S. Department of Justice (DOJ) has filed a criminal indictment against FedEx Corporation and its subsidiaries, FedEx Express and FedEx Services, related to a DOJ investigation concerning the transportation of packages for online pharmacies.

The indictment alleges that FedEx, along with certain pharmacies, conspired to unlawfully distribute controlled substances and conspired to unlawfully distribute misbranded drugs.

FedEx Corporation states that it believes its employees have acted in good faith at all times and that the company has not engaged in any illegal activities. FedEx intends to vigorously defend itself against the charges.

The company acknowledges that if convicted, remedies could include fines, penalties, forfeiture, and compliance conditions. While it is too early to estimate the amount of loss, FedEx states that it is reasonably possible the impact could be material if convicted.