SEC Charges Independent Director for Proxy Disclosure Rule Violations

In a recent complaint, the Securities and Exchange Commission (SEC) charged James R. Craigie, former CEO, Chairman, and board member of Church & Dwight Co. Inc., for violating proxy disclosure rules under the Securities and Exchange Act of 1934 by, “standing for election as an independent director without informing the board of his close personal friendship with a high-ranking Church & Dwight executive.” The complaint highlighted that Mr. Craigie had a personal relationship with a member of the Church & Dwight executive team including frequent vacations which the executive paid for, as well as attempts to conceal the personal nature of the relationship from other board members. The complaint further alleges that Craigie attempted to better the executive’s position by informing the executive of key parts of the succession planning process and taking steps to encourage the executive’s advancement. Mark Cave, Associate Director of the SEC’s Division of Enforcement stated, “By concealing his relationship with a company executive, Mr. Craigie undermined the board’s director independence process and compromised the company’s disclosures.” The settlement included a $175,000 civil penalty and a five-year officer-and-director bar (subject to court approval).

Click here to read the press release and complaint from the Commission.