Doxa Special Projects Group (“Doxa SPG”) always advises clients to conduct pro-active due diligence before entering into a business relationship with an entity, foreign or domestic. Whether it is a potential joint-venture, partnership or acquisition, it is critical to thoroughly investigate and research the businesses involved in order to properly underwrite the investment and risks in the transaction.
Foreign Corrupt Practices Act
On April 24, 2018, the Securities and Exchange Commission (“SEC”) announced that Dun & Bradstreet will pay $9 million for violations of the Foreign Corrupt Practices Act (“FCPA”) arising from improper payments made by two of its indirect Chinese subsidiaries, Shanghai Huaxia Dun & Bradstreet Business Information Consulting (“HDBC”) and Shanghai Roadway D&B Marketing Services (“Roadway”).
From 2006 through 2012, Dun & Bradstreet’s HDBC and Roadway subsidiaries made unlawful payments to obtain or retain business. HDBC and Roadway used third-party agents to make unlawful payments to obtain data vital to Dun & Bradstreet’s business as a provider of business financial information. HDBC acquired non-public financial statement information on Chinese entities, in violation of Chinese law, by making unlawful payments to Chinese government officials. Roadway made improper payments to third parties to acquire non-public personal data that was used in its products and made improper payments to obtain specific business in violation of Chinese law.
According to the SEC, Dun & Bradstreet had concerns before closing on the acquisition yet moved forward anyway. “Despite concerns raised during pre-acquisition due diligence efforts, Dun & Bradstreet failed to take appropriate action to stop the improper payments or the false entries into the subsidiary’s books and records, which continued for several years post-acquisition,” the SEC said.
Dun & Bradstreet is in the information gathering business and seems to have been aware of this behavior yet apparently turned a blind eye. Other businesses that have been fined by the SEC or Justice Department for FCPA violations get caught for not having done proper due diligence before the transaction. Doxa SPG highly recommends doing pre-partnership and pre-acquisition due diligence in order to identify potential risks in the transaction that could meaningfully affect the value of the business. We would also recommend doing thorough background checks on the top managers at the target company.
ABOUT DOXA SPG
DOXA SPG is a consulting firm focused on providing corporate finance advisory services, due diligence, litigation support and market research to clients in the U.S., Europe, South America and Asia. The company was founded by Christopher Vulliez in January 2017 and is based in New York.
Doxa SPG was formed to meet the special needs of middle market corporations and law firms who need a more specialized and personalized solution than is offered in the marketplace. Most large consulting companies cannot offer this level of flexibility due to the size of their overhead. We pride ourselves on providing clients with highly customized solutions that will meet their specific needs on a project, transaction or legal matter.
Doxa SPG also provides litigation support and financial analysis to law firms and former State and Federal prosecutors.
Christopher Vulliez founded Doxa SPG in January 2017. Prior to Doxa SPG, Chris was Managing Director of Washington Square Analytics, Inc., where he ran all of the firm’s corporate finance, due diligence and risk mitigation projects. Chris has been conducting financial analysis, corporate research and due diligence on companies globally for the last 23 years. Previously, Chris was a co-founder and Portfolio Manager at Cadmus Capital Management, Portfolio Manager at Perry Capital and senior research analyst at Brahman Capital Management. Chris began his career at Dillon Read & Co, Inc. as an investment banker in the mergers and acquisitions department. Chris received a B.A. in Economics from Columbia University.
For More Information Contact:
Doxa Special Projects Group, LLC
Tel: 646-919-6464