Dun & Bradstreet, a commercial data and analytics provider, disclosed in a securities filing last week that it spent slightly more this time around than the same period last year on costs associated with its China investigation into possible violations of the Foreign Corrupt Practices Act.
Most recently, the company disclosed to the Securities and Exchange Commission in its Form 10-Q, dated May 6, that it incurred $0.4 million of legal and other professional fees during the three months ended March 31, 2015, related to matters in China, compared to the $0.3 million it incurred for the three months ended March 31, 2014.
In 2012, Dun & Bradstreet announced that it had temporarily suspended its Shanghai Roadway D&B Marketing Services (Roadway) operations in China, pending an investigation into allegations that its data collection practices may have violated local Chinese consumer data privacy laws. Thereafter, the company decided to permanently cease the operations of Roadway.
In addition, Dun & Bradstreet launched an internal investigation for potential violations of the FCPA and certain other laws in its China operations. The company further notified the SEC and the Department of Justice of the investigation, “and we are continuing to meet with representatives of both the SEC and DOJ in connection therewith,” the Form 10-Q stated. “Our investigation remains ongoing and is being conducted at the direction of the audit committee.”
In 2012, Shanghai District Prosecutor charged Roadway and five former employees with illegally obtaining private information of Chinese citizens. That same year, the Chinese court imposed a monetary fine on Roadway and fines and imprisonment on four former Roadway employees. The fifth former Roadway employee was separated from the case.
Dun & Bradstreet said it “cannot yet predict the ultimate outcome of the matter or its impact on our business, financial condition, or results of operations.” Based on discussions with these agencies, however, the company said it is “probable that it will incur a loss related to the government’s investigation.”
Additionally, Dun & Bradstreet the Justice Department advised it in February that the agency “will be proposing terms of a potential settlement, but we are unable to predict the timing or terms of any such proposal.”