Dun & Bradstreet Corporation (DnB) has agreed to pay a $9 million fine to settle Foreign Corrupt Practices Act (FCPA) charges in connection to two Chinese subsidiaries that, according to the US Securities and Exchange Commission (SEC), “used third-party agents to make unlawful payments to obtain data vital to Dun & Bradstreet’s business as a provider of business financial information.”
An investigation on DnB’s possible FCPA and China’s data privacy violations was launched in 2012, after multiple securities filings showed DnB shut down one of its China based subsidiaries, Roadway, in March 2012 with DnB self reporting the possible violations. In September 2012, the Shanghai District Prosecutor fined Roadway $160,000 and jailed five former employees for illegally gathering private information on Chinese citizens.
HDBC, another DnB subsidiary located in China, also raised DnB’s concerns on improper payments but was still allowed to continue operating for two years, during which time the SEC claims that HDBC was bribing government officials for private information on citizens and falsely recording the payments as business expenses, and that DnB failed to take action to stop this behavior.
DnB settled its case with the SEC through an administrative order, thus avoiding court and was fined $2 million as a civil penalty on top of being ordered to disgorge $6 million and pay a $1.1 prejudgment interest. The US Justice Department (DOJ) issued a letter addressed to DnB stating that they have decided to decline “prosecution consistent with the FCPA Corporate Enforcement Policy” due to DnB’s self disclosure, full cooperation with the investigation, which included employee interviews and translating documents to English, and amplifying their compliance programs and internal accounting controls. In addition to firing 11 former employees connected to the violations, DnB also punished other employees by lowering salaries, reducing bonuses and “formally reprimanding them.”
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