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SEC v. Chiquita Brands International, Inc.

 
:
Chiquita Brands International, Inc.
:
SEC Civil
:
October 3, 2001
:
SEC v. Chiquita Brands International, Inc.
:
SEC v. Chiquita Brands Int'l., Inc., 1:01-cv-02079 (D.D.C. 2001).
:
This is part of a series of cases in which the SEC held a parent issuer strictly liable for false books and records and inadequate internal controls related to payments to officials even while affirmatively acknowledging that the parent had no knowledge or involvement in the subsidiary's conduct.
:
Agriculture-Food
:
Colombia
:
1996; 1997
:
Colombian customs officials
:
Chiquita Brands International, Inc. ("Chiquita") settled this action with the SEC without admitting or denying the following facts alleged in the SEC's order:

Chiquita is a New Jersey corporation with an indirectly wholly-owned subsidiary, C.I. Bananos de Exportacion, S.A. ("Banadex"), in Colombia engaged in the import/export of bananas and operating a port facility. In breach of Chiquita's policies and procedures and without the knowledge or consent of any Chiquita employee, Banadex's chief administrative officer authorized Banadex's agent, Commercio Exterior Asesores Limitada ("CEA"), to pay Colombian customs officials to obtain the port facility license renewal and instructed Banadex's security officer and controller to make the payments from a Banadex account for discretionary expenses. The payments were incorrectly identified in Banadex's books and records. Chiquita's internal audit staff discovered the payments during an audit review, and after conducting an internal review, Chiquita took corrective action, including terminating the responsible Banadex employees and reinforcing internal controls in its Colombian operations. Chiquita audit staff had previously made management aware of a number of instances in which Banadex had not provided required documentation regarding discretionary payments.
:
Books and records (Issuer), Internal controls (Issuer)
:
Civil penalty, Civil Settlement, Injunction/Cease and desist
:
Civil penalty of $100,000.
:
100,000
:
0
:
Issuer
:
U.S.
:
License/Permit
:
Not stated.
:
Cash, Wire/check
:
Customs Broker or Agent/Consultant
:
30,000
:
Colombia
:
Colombia
:
No
:
No