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Enforcement Action Dataset

 

Initiation Date:    04/23/2018  Information

Prosecuting Agency:    U.S. Securities and Exchange Commission

Name of Prosecuting Attorneys:   

  • Paul W. Sharratt, SEC Headquarters
  • Michael Catoe, SEC Headquarters
  • Sonali Singh, SEC Headquarters

Assisting Agencies:    U.S. Department of Justice , Federal Bureau of Investigation

Type of Action:    SEC Administrative Proceeding

Origin of the Proceeding:    Voluntary disclosure

Whistleblower:    Unknown

Case Status:    Resolved


Summary  Information

The Dun & Bradstreet Corporation ("D&B"), a Delaware corporation headquartered in New Jersey, was a global provider of business information. D&B managed its global operations through various international segments, which included regional management in Europe, Canada, Asia Pacific, and Latin America. D&B’s Asia Pacific interests included subsidiaries, joint ventures and strategic partnerships in China, Taiwan, and Hong Kong, which were collectively managed through offices located in Shanghai. D&B securities were registered with the SEC and traded on the New York Stock Exchange.

Shanghai Huaxia Dun & Bradstreet Business Information Consulting Co., Limited (“HDBC”) was a Chinese joint venture formed in November 2006 between D&B’s Chinese subsidiary, Dun & Bradstreet International Consultant (Shanghai) Co. Ltd. (“D&B China”), and Chinese company Huaxia International Credit Consulting Co. Limited (“Huaxia”). D&B China was the fifty-one percent majority shareholder of HDBC and its books, records, and financial accounts are consolidated into D&B’s books and records.

Shanghai Roadway D&B Marketing Services Co., Ltd. (“Roadway”) was a Chinese company aquired by D&B in June 2009. The acquisition consisted of ninety percent of Roadway’s shares and was made through a wholly owned subsidiary of D&B. Roadway’s books, records, and financial accounts were consolidated into those of D&B. In March 2012, D&B voluntarily suspended, and then in May 2012, voluntarily shut down the operations of Roadway in part as a result of its discovery of the illegal conduct described in this enforcement action.

According to the allegations in the cease and desist order, from approximately 2006 through 2012, D&B’s HDBC and Roadway subsidiaries made unlawful payments in order to obtain or retain business in China. Specifically, during that time period, HDBC made unlawful payments to provincial offices of the Chinese State Administration of Industry and Commerce in order to obtain access to financial statement data of potential customers in China. Additionally, before and following its acquisition by D&B in July 2009, Roadway made a series of improper payments to customer “decision-makers” to obtain or retain business. Of the 1,036 customers whose “decision makers” received payments in this period, at least 156 were Chinese government agencies or state owned enterprises. Many of the payments made by HDBC and Roadway were made through third party agents in China under the mistaken belief that using third parties would shield the company from any legal liability. None of these payments were properly recorded in D&B's books and records.

In a settled administrative proceeding on April 23, 2018, the SEC ordered D&B to cease and desist violations of the books and records and internal controls provisions of the FCPA. The SEC further ordered D&B to pay disgorgement of $6,077,820 plus prejudgment interest of $1,143,664 and a civil penalty of $2 million. In agreeing to the settlement, the SEC noted D&B's self-disclosure of the misconduct and the company's thorough cooperation and remediation.

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