Comments/Updates on Disclosed SEC Investigative Activity
Dun & Bradstreet Corp. (DNB): A Disclosed SEC Investigation is On-Going – and Now it’s Protracted. In a letter dated 08-Dec-2014, the SEC confirmed that this company was somehow involved in a recently active and ongoing investigation.
Most recent disclosure, from the 10-Q filed on 11/3/2014 --
On March 18, 2012, we announced we had temporarily suspended our Shanghai Roadway D&B Marketing Services Co. Ltd. (“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, we have been reviewing certain allegations that we may have violated the Foreign Corrupt Practices Act and certain other laws in our China operations. As previously reported, we have voluntarily contacted the Securities and Exchange Commission ("SEC") and the United States Department of Justice ("DOJ") to advise both agencies of our investigation, and we are continuing to meet with representatives of both the SEC and DOJ in connection therewith. Our investigation remains ongoing and is being conducted at the direction of the Audit Committee.
Our Take: Protracted SEC probes can definitely come back to haunt investors later. But we have a different concern here. We suggest few, if any, can tell us why this matter would be material to DNB? Management thinks it is. That's why they told you about it. But why?
If either you or those covering the company can't answer that question then you need to proceed with caution. A risk disclosed is not necessarily a risk discounted if no one knows what it means. Food for thought.
Notes: The SEC did not disclose the details on investigations referenced above. The SEC reminds us that its assertion of the law enforcement exemption should not be construed as an indication by the Commission or its staff that any violations of law have occurred with respect to any person, entity, or security. New SEC investigative activity could theoretically begin or end after the date covered by this latest information which would not be reflected here.
