We contacted tech support, they supplied us a valid v18 signature and the problem was solved.
It seems that the IPSDefs update is not working properly for the last 15 days or so.

Virus defs not updating
I have several PCs with NIS 2012 (preferred version) installed with one Vista and four Windows 7 OS.
All OS are 64-bit except one Windows 7 32-bit, my problem PC here.
Hello, Fortinet started in march rolling out AV signature v18for certain devices.
Back in april we had the same problem - a faulty signature v18which prefented further updates and no possibility to manually download a valid signature package from the download page (there are only signatures v17.xyz).
They would not release each update but would test them and eventually pick the one to release.
That site showed each update and what it fixed and at the top it would show the release version.
It is also important to know what specific defs are not updating - AV? As there have been many improvements over recent versions, it will also be important to know the version of SEP on the SEPM and the SEP client- can that info be supplied?
Also: check out the LU status on the SEPM- what exact versions of definitions is it making available to clients?
It's more likely, though, that the SEPM is (for one reason or another) not offering up what the SEP clients are looking for.