Cardinal Health
CAH
Health Care
3
exclusion reasons
2 themes
This page is part of our public exclusion list — a transparency tool that shows which companies we screen out and why. It is not investment advice, and it is not an accusation. But it is subject to change as our understanding of the facts evolves.
Cardinal Health has been subject to multiple enforcement actions for corruption and fraud in its business operations. In February 2020, the SEC charged Cardinal Health with violating the Foreign Corrupt Practices Act (FCPA), resulting in an $8.8 million settlement. The SEC order found that employees at its former Chinese subsidiary, Cardinal Health China, directed improper payments to government-employed healthcare professionals to induce the purchase of medical devices, circumventing the company's internal accounting controls.
This pattern of misconduct extends to domestic operations. In January 2022, Cardinal Health agreed to pay more than $13 million to resolve allegations it violated the Controlled Substances Act by failing to report suspicious orders of opioids to the Drug Enforcement Administration. This followed a separate $44 million settlement in 2016 for alleged record-keeping violations of the same Act. The Federal Trade Commission also reached a settlement with Cardinal Health in 2015 for anticompetitive conduct. ViolationTracker documents a total of $213.7 million in penalties across 43 environmental, consumer protection, and other regulatory enforcement records for the company.
Cardinal Health is a major medical supply company that provides pharmaceuticals and healthcare products to state prison systems. According to AFSC Investigate, the company has provided financing to private prison and immigrant detention operators. A South Carolina state contract shows Cardinal Health receiving payments for "MED SCIENT & LAB SUPPLIES" from a department fund, indicating a commercial relationship with a state corrections system.
The company's involvement with the carceral system extends to legal settlements concerning its conduct. Cardinal Health was part of a multi-district opioid litigation settlement, from which a state deposited over $10 million. While the settlement addressed public harm, the company has also secured a $33 million state contract to provide medical treatment to prisoners, effectively using settlement funds to establish a revenue stream from the same correctional system.
This pattern shows Cardinal Health integrating its business with prison healthcare services, deriving revenue from contracts with state corrections departments, and providing financial support to private detention facilities.
Pattern of regulatory non-compliance: $6B opioid settlement, $35M SEC accounting fraud settlement, $250M+ safety penalties — fines absorbed as cost of business rather than triggering structural reform
Research Sources
8 organizations
Related Exclusions
Wondering what we do invest in?
The Naughty List
A digest of changes to our exclusion list — new additions, removals, and the evidence behind them. We review the list continuously as new evidence surfaces.
Companies appear on our exclusion list based on our investment judgment — not because they've done anything illegal. This is a difference of values and opinion, not an accusation of wrongdoing. Exclusion does not constitute a recommendation against investing in any company, and absence from the list does not constitute a recommendation to invest.
This information is provided for educational and transparency purposes only and should not be relied upon as investment advice. Data is drawn from independent watchdogs, NGOs, government registries, and Ethical Capital's ongoing research — see Research Sources for the full list.
Ethical Capital LLC is a state-registered investment adviser in Utah (CRD #316032). Registration does not imply a certain level of skill or training.