Issue Date: March 22, 2004
Crompton Corp. says it has reached agreements with the U.S. Justice Department and Canadian authorities regarding criminal charges of price fixing in rubber chemicals. The investigations began in late 2002 in both countries, along with a similar investigation in Europe.
The agreement with Justice calls for Crompton to plead guilty to "participating in a combination and conspiracy to suppress and eliminate competition by maintaining and increasing the price of certain rubber chemicals sold in the U.S. during the period 1995 to 2001." In Canada, the company agreed to plead guilty to one count of "conspiring to lessen competition" in rubber chemicals.
Crompton agreed to pay a $50 million fine in the U.S., payable in six annual installments without interest, beginning this year. It has agreed to a $7 million fine in Canada under similar terms. The agreements must be submitted to courts in the U.S. and Canada for approval before the investigations will be resolved.
Crompton says it has completed its own internal investigation, strengthened its training and compliance programs, and taken personnel actions where appropriate.
But the firm is not yet out of the litigation woods. The European Commission continues a civil investigation of price fixing in rubber chemicals in Europe. And there are civil class-action lawsuits pending in the U.S. District Court for the Northern District of California.
The firm also is named in civil suits in U.S. federal courts regarding price fixing in ethylene propylene diene monomer (EPDM), plastics additives, and nitrile rubber. It won amnesty from federal prosecution in those cases by cooperating with authorities.
Crompton CEO Robert L. Wood says: "The resolution of these investigations and the personnel actions we have taken are major steps in putting these issues behind us and enabling us to concentrate on the future. We continue to work diligently to resolve the pending civil litigation and the EC's rubber chemicals investigation."
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