United States Securities and Exchange Commission
Exchange Act Release No. 39,157 (Sept. 30, 1997)
J. Peter Grace, Jr. was the chief executive officer of W. R. Grace & Company (WRG) (defendant) until 1992, when Grace, Jr. retired. After his retirement, Grace, Jr. essentially retained the majority of his employment benefits, including the use of company property. Only non-management directors were involved in the negotiation of Grace, Jr.’s retirement benefits, and specific information regarding Grace, Jr.’s benefits was not available to management. Grace, Jr. incorrectly responded to questionnaires used by WRG in preparing its 1992 and 1993 Form 10-K and proxy statements by stating that he had not received benefits during those years. In February 1993, WRG moved to sell Grace Hotel Services Corporation (GHSC) to Grace, Jr.’s son, J. Peter Grace III. WRG was charged with violating the Securities Exchange Act of 1934, 15 U.S.C. § 78a, for failing to disclose: (1) the substantial benefits given to Grace, Jr. and (2) the sale of GHSC. The Securities and Exchange Commission (SEC) then issued a cease-and-desist order against WRG to not commit future violations. Following these events, Grace, Jr. passed away.
Rule of Law
Holding and Reasoning
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