In re W. R. Grace & Co.
United States Securities and Exchange Commission
Exchange Act Release No. 39,157 (Sept. 30, 1997)
After J. Peter Grace, Jr. retired as CEO of W. R. Grace & Company (WRG) (defendant) in 1992, he retained most of his employment benefits, including use of company property, with only non-management directors involved in negotiating those benefits and management kept largely in the dark about the specifics. Grace, Jr. gave inaccurate answers on WRG's internal questionnaires for its 1992 and 1993 Form 10-K filings and proxy statements, denying he'd received such benefits. Separately, WRG sold a subsidiary, Grace Hotel Services Corporation, to Grace, Jr.'s son in early 1993. WRG was charged with violating the Securities Exchange Act by failing to disclose both Grace Jr.'s substantial retirement benefits and the related-party sale, and the SEC prepared to issue a cease-and-desist order against WRG; by that point, Grace, Jr. had died.
Whether a change of circumstances, such as a revision of the board of directors, may prevent the issuance of a cease-and-desist order for violations of the Securities Exchange Act.