THE DUN & BRADSTREET CORPORATION

INDUSTRY

Technology / Software / Electronics

CORPORATE HEADQUARTERS

Short Hills, New Jersey, United States of America

SUMMARY OF ALLEGATIONS

Nationality of Foreign Officials: China

Summary of Allegations:

From 2006 - 2012, two of D&B's indirect subsidiaries in China -- Shanghai Huaxia Dun & Bradstreet Business Information Consulting Co. Limited ("HDBC") and Shanghai Roadway D&B Marketing Services Co., Ltd ("Roadway") --were alleged to have made unlawful payments to Chinese officials via third party agents and kickbacks in order to obtain otherwise restricted, non-public financial statement / consumer data that they used to acquire and retain business.

HDBC and Roadway did not accurately reflect these payments in their books and records (which were consolidated into D&B's).  D&B failed to maintain sufficient internal accounting controls to detect and prevent such improper payments. 

In its SEC Form 8-K filed on 18 March 2012, the Company stated, "D&B has been reviewing certain allegations that local employees may have violated the U.S. Foreign Corrupt Practices Act ("FCPA") and certain other laws in our China operations. 

On 8 May 2012, the Company announced that it had completely shut down its Roadway business in part as a result of its discovery of the illegal conduct. 


Approximate Alleged Payments to Foreign Officials: Unspecified

Business Advantage Allegedly Obtained: award of contracts / additional business.

ENFORCEMENT RESULTS

Agencies: China: Shanghai District Prosecutor
Results: Criminal Fine, Prosecution of Individuals
Year Resolved: 2013
Compliance Monitor:
Ongoing: No
Details:

According to several Chinese news portals, D&B Shanghai was raided by local police on 15 March 2012. Three D&B Shanghai senior executives responsible for data procurement were arrested, and four computers were confiscated. The General Manager of D&B Shanghai, Weili Cui, was detained by police. Both D&B Shanghai and the Shengyang offices of Dun & Bradstreet were closed down. Chinese news reports allege that D&B is accused of violating privacy protection laws, and that it collected data illegally about 150 million Chinese individuals from financial institutions and hospitals, and then sold some of the information for 23 cents per person.

In its SEC Form 8-K filed on 18 March 2012, D&B disclosed that the company is cooperating with the local Chinese authorities.

On September 28, 2012, Roadway was charged in a Bill of Prosecution, along with five current or former employees, by the Shanghai District Prosecutor with illegally obtaining private information of Chinese citizens. A trial date has not yet been set. In its Form 10-Q filed with the SEC on 1 November 2012, the company disclosed that it has been advised that a conviction of Roadway and the five individuals is likely, and that a criminal fine will be imposed on Roadway.

January 2013 - Roadway and the 5 individuals were convicted and Roadway was required to pay a criminal fine in the amount of USD 160,000. 



Agencies: United States: Department of Justice
Results:
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:

18 March 2012 - In its SEC Form 8-K filed on 18 March 2012, D&B disclosed that the company voluntarily reported these matters to the DOJ and the SEC.

As of 23 April 2018, no action has been taken.



Agencies: United States: Securities and Exchange Commission
Results: Cease-and-Desist Order, Civil Penalty, Disgorgement
Year Resolved: 2018
Compliance Monitor:
Ongoing: No
Details:

18 March 2012 - In its SEC Form 8-K filed on 18 March 2012, D&B disclosed that the company voluntarily reported these matters to the DOJ and the SEC.

 23 April 2018 - The SEC issued a cease-and-desist order with D&B's consent (without admitting or denying the findings) pursuant to D&B's offer of settlement. D&B was ordered to: (1) cease and desist from committing any violations of Sections 13(b)(2)(A) - (B) of the Exchange Act, (2) pay disgorgement of USD 6,077,820, prejudgment interest of USD 1,143,664, and a civil penalty of USD 2MM. 



ENTITIES/INDIVIDUALS INVOLVED

DETAILS OF HOW CONDUCT WAS DISCOVERED

Discovery Method: Voluntary Disclosure
Details:

The investigation into the data collection (privacy) violations began with a report by CCTV, China Central TV Station, the predominant state television broadcaster in mainland China; Shanghai police opened its own investigation after being informed.

The company then made voluntary disclosure of the information to the SEC and the DOJ.


Country: China

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