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# Other

# In the Matter of Baxter International, Inc. Admin. Proc. File No. 3-20781

                            Aug. 29, 2022                       

                                - In the Matter of Jeffrey Schaible  	Admin. Proc. File No. 3-20782
                                - In the Matter of Scott Bohaboy  	Admin. Proc. File No. 3-20783

On February 22, 2022, the Commission instituted and simultaneously settled three related cease-and-desist proceedings (the “Orders”) against Baxter International, Inc. (“Baxter”), Jeffrey Schaible (“Schaible”), and Scott Bohaboy (“Bohaboy”) (collectively, the “Respondents”). *See* the Commission’s Orders: Release Nos. 33-11032, 33-11033, and 33-11034, respectively. During relevant times, Schaible was an employee in the Treasury department of Baxter, and Bohaboy was its Treasurer. In the Orders, the Commission found that, beginning in at least 2009 and continuing through July 2019, Baxter improperly leveraged Baxter’s foreign exchange rate convention by engaging in intra-company transactions for the purpose of generating foreign exchange accounting gains or avoiding foreign exchange accounting losses (the “FX Transactions”). These FX Transactions had the effect of materially misstating Baxter’s net income as reported in public filings. In October 2019, Baxter announced that it was conducting an internal investigation concerning the FX Transactions. In March 2020, Baxter restated its financial statements, which reduced its previously reported net income for 2017 through June 30, 2019, and retained earnings as of January 1, 2017, by $582 million, collectively.

In the Baxter Order, the Commission ordered Baxter to pay $18,225,000.00 in civil money penalties to the Commission and created a Fair Fund pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, so the penalties paid, along with the disgorgement and interest paid, could be distributed to harmed investors (the “Baxter Fair Fund”). In the Schaible and Bohaboy Orders, the Commission ordered Schaible to pay disgorgement, prejudgment interest, and a civil penalty totaling $189,359.00 and Bohaboy to pay a civil money penalty of $125,000 to the Commission. The Commission created Fair Funds in each of the Schaible and Bohaboy proceedings and ordered them to be combined with the Baxter Fair Fund.

The Respondents have paid in full. The Baxter Fair Fund is comprised of the $18,314,359.00 paid by the Respondents and has been deposited in an interest-bearing account at the United States Department of the Treasury’s Bureau of the Fiscal Service.

On June 6, 2022, the Commission issued an order appointing Miller Kaplan Arase LLP, as the Tax Administrator of the Baxter Fair Fund. *See* the Commission’s Order: Release No. 34-95043.

On July 1, 2022, the Commission issued an order appointing Epiq Class Action & Claims Solutions, Inc. (“Epiq”) as the Fund Administrator to oversee the administration and distribution of the Baxter Fair Fund and, set the administrator’s bond amount. *See* the Commission’s Order: Release No. 34-95192.

On February 13, 2023, the Commission published a notice of the proposed plan of distribution and opportunity for comment and simultaneously published the proposed plan of distribution (“Proposed Plan”). The notice provides the public with 30 days to submit their comments on the Proposed Plan. *See* the Commission’s Notice: Release No. 34-96898 and the Proposed Plan.

The Proposed Plan provides that the distribution of the Baxter Fair Fund shall be made to those injured investors who purchased Baxter International common stock during the period May 6, 2015 through October 23, 2019, inclusive, and who suffered a recognized loss as calculated in the plan of allocation in the Plan.

After careful consideration of the comments received on the Proposed Plan, on September 25, 2023, the Commission issued an order approving the Proposed Plan without modification. *See* the Commission’s Order: Release No. 34-98512 and the approved Plan of Distribution (the “Plan”).

For more information, please contact the Fund Administrator:

Website: www.baxterfairfunddistribution.comEmail: info@baxterfairfunddistribution.comPhone: 1-844-787-6813

Address:Baxter Fair FundPO Box 6700Portland, OR 97228-6700

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