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SEC v. The Dow Chemical Company

 
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Dow Chemical Co.
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SEC Civil
:
February 13, 2007
:
SEC v. The Dow Chemical Company
:
SEC v. Dow Chemical Co., No. 07-CV-336 (D.D.C. 2007); In the Matter of the Dow Chemical Co., Administrative Proceeding No. 3-12567 (SEC Feb. 13, 2007)
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In this case, the company hired an independent compliance consultant as part of a larger remedial effort and did not have a monitor imposed upon them.
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Chemicals
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India
:
1996; 1997; 1998; 1999; 2000; 2001
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An official of India's Central Insecticides Board; Indian state officials, including product licensing officers; and Indian sales and excise tax and customs officials.
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Dow settled this action with the SEC without admitting or denying the following facts alleged in the SEC's complaint.

DE-Nocil, a fifth-tier foreign subsidiary of Dow, allegedly made an estimated $200,000 in improper payments to Indian government officials at the state and federal level, including $39,700 to an official in India's Central Insecticides Board to expedite the registration of three DE-Nocil products. Most of the payments were made through contractors who added fictitious charges to their bills or issued false invoices to DE-Nocil and then directed the money to "consultants" or officials.

The SEC complaint alleges that DE-Nocil generated $435,000 in direct operating margin for Dow from the accelerated sales of these three products, $329,295 of which went to Dow, based on Dow's ownership interest at the time. The Complaint alleges that none of the payments was properly recorded in DE-Nocil's books.

DE-Nocil also allegedly made an estimated $87,400 in numerous and frequent payments to state-level agricultural inspectors, each of which was well under $100, so that they would not interfere with the sale of DE-Nocil's products. It also allegedly made payments to sales tax officials ($11,800), excise tax officials ($3,700), customs officials ($1,500), improper payments for gifts, travel and entertainment ($37,600), and payments to other government officials ($19,000).

In February 2007, the SEC filed a settled civil action against Dow for violating the books and records and internal controls provisions of the FCPA. Without admitting or denying the allegations, Dow agreed to pay a $325,000 civil penalty. At the same time, the Commission issued a settled administrative order requiring Dow to cease and desist from violating the books and records and internal controls provisions of the FCPA. The company hired an independent compliance consultant and a monitor was not imposed upon them.
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Books and records (Issuer), Internal controls (Issuer)
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Civil penalty, Injunction/Cease and desist
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$325,000 civil penalty.
:
325,000
:
0
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Issuer
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U.S.
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License/Permit, Tax
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435,000
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Cash, Entertainment, Gifts, Travel
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Direct, Sales Agent/Consultant
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200,000
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India
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No