Prosecuting Agency:
U.S. Securities and Exchange Commission
Type of Action:
SEC Federal Court Proceeding
Docket or Case Number:
01-cv-02079
Court:
District of Columbia
Name of Prosecuting Attorneys:
Linda Chatman Thomsen, SEC Headquarters
Gregory S. Bruch, SEC Headquarters
Gerald T. Balacek, SEC Headquarters
US Assisting Agencies: Unknown
Foreign Enforcement Action/Investigation: Unknown
Foreign Assisting Agencies: Unknown
Origin of the Proceeding:
Unknown
Whistleblower:
Unknown
Case Status:
Resolved
Summary
Chiquita Brands International, Inc. (“Chiquita”) is a New Jersey corporation with its headquarters in Cincinnati, Ohio. The common stock of Chiquita is registered with the Commission pursuant to Section 12(b) Exchange Act and is listed on the New York Stock Exchange.
C.I. Bananos de Exportacion S.A. (“Banadex”) is an indirect wholly-owned subsidiary of Chiquita with its headquarters in Medellin, Colombia. Banadex indirectly reports to Chiquita.
In 1995 and 1996, without the knowledge or consent of any Chiquita employees within the United States and in contravention of Chiquita’s policies, Banadex’s chief administrative officer authorized the payment of the equivalent of approximately $30,000 to local officials to secure renewal of a license allowing Banadex to hold goods for customs inspection or “nationalization” at its Turbo, Colombia port facility. The payment was not properly recorded in Banadex's books and records, which are part of Chiquita’s books and records. In 1997, Chiquita’s internal audit staff discovered the payment during an audit review and, after an internal investigation, Chiquita took corrective action which included terminating the responsible Banadex employees and reinforcing internal controls at its Colombian operations.
On October 2, 2001, the SEC filed a single count Complaint in the District of Columbia against Chiquita alleging violations of the books & records and internal controls provisions of the FCPA. On the same date, Chiquita consented to entry of final judgment without admitting or denying the allegations in the Complaint. The court ordered Chiquita to pay a civil penalty of $100,000.
In a related administrative proceeding on October 3, 2001, the SEC issued a Cease and Desist order against Chiquita which ordered the company to cease and desist violating the books & records and internal controls provisions of the FCPA.
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