SEC Charges Independent Director and Ex-CEO of Church & Dwight With Concealing Close Friendship with Company Executive
September 30, 2024 5:47 PM EDT | Source: Newsfile SEC Press Digest
Washington, D.C.--(Newsfile Corp. - September 30, 2024) - The Securities and Exchange Commission today announced settled charges against James R. Craigie, a former CEO, Chairman, and board member of Church & Dwight Co. Inc., for violating proxy disclosure rules by standing for election as an independent director without informing the board of his close personal friendship with a high-ranking Church & Dwight executive thereby causing Church & Dwight’s proxy statements to contain materially misleading statements. Without admitting or denying the SEC’s allegations, Craigie agreed to resolve the SEC’s charges. If the settlement is approved, Craigie will be subject to a five-year officer-and-director bar.
The SEC’s complaint, filed in U.S. District Court for the Southern District of New York, alleges that, between January 2020 and March 2023, Craigie maintained a close personal relationship with a member of Church & Dwight’s executive team. Among other things, Craigie frequently vacationed with the executive and the executive’s spouse, including six trips that spanned eight countries on five continents. Craigie paid more than $100,000 for them to join Craigie and his spouse on several of these international vacations. According to the SEC’s complaint, Craigie never disclosed his relationship with the executive to Church & Dwight and he allegedly encouraged the executive to conceal the relationship as well. As a result, the company’s board was unaware of Craigie’s personal relationship with the executive, and the company’s proxy statements subsequently identified Craigie as an independent director. Craigie ultimately served as an independent board member from 2019 to 2023. When Church & Dwight began a CEO succession process, Craigie allegedly shared confidential details about the process with the executive and took steps to better position the executive for succession in the future. Once Church & Dwight learned of Craigie’s relationship with the executive, it determined that he was not an independent director.
“Shareholders expect independent directors to exercise autonomous judgment in their decision making, free from undisclosed conflicts,” said Mark Cave, Associate Director of the SEC’s Division of Enforcement. “By concealing his relationship with a company executive, Mr. Craigie undermined the board’s director independence process and compromised the company’s disclosures.”
Without admitting or denying the allegations, Craigie agreed to be permanently enjoined from further violations of the proxy provisions of the Securities Exchange Act of 1934, pay a civil penalty of $175,000, and a five-year officer-and-director bar. The settlement is subject to court approval.
The SEC’s investigation was conducted by Elliot Weingarten and James Valentino, assisted by Tonya Tullis and David Nasse, and supervised by Sarah Lamoree, Jeffrey Weiss, and Mr. Cave.
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