UNITED STATES OF AMERICA

UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934

Release No. 101800 / December 3, 2024

ADMINISTRATIVE PROCEEDING

File No. 3-21145

In the Matter of

Compass Minerals International,

Inc.,

Respondent.

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NOTICE OF PROPOSED PLAN OF

DISTRIBUTION AND OPPORTUNITY

FOR COMMENT

Notice is hereby given, pursuant to Rule 1103 of the United States Securities and

Exchange Commission’s (the “Commission”) Rules on Fair Fund and Disgorgement Plans (the

“Commission’s Rules”), 17 C.F.R. § 201.1103, that the Division of Enforcement has submitted

to the Commission a proposed plan of distribution (the “Proposed Plan”) for the distribution of

monies paid in the above-captioned matter.

On September 23, 2022, the Commission issued an Order instituting and simultaneously

settling cease-and-desist proceedings (the “Order”)1 against Compass Minerals International, Inc.

(“Compass” or the “Respondent”). In the Order, the Commission found various disclosure

violations. From 2017 to 2018, Compass made repeated misrepresentations about its plans to

reduce costs and about the production levels at its Goderich salt mine. These misrepresentations

were the consequence of a deficient disclosure process at the company in which statements to

investors were not reviewed by personnel who were sufficiently knowledgeable about both

Compass’s operations and its disclosure obligations. The failures in Compass’s disclosure

controls and procedures resulted not only in material misstatements about the mine, but in the

company’s senior management not having sufficient information about environmental issues

caused by a facility it owned in Brazil to make appropriate determinations about disclosures.

Compass calls its Goderich salt mine in Canada the “crown jewel” of its asset portfolio.

Between 2015 and 2019, Compass upgraded its mining system at Goderich from drilling-andblasting to continuous mining and continuous haulage (“CMCH”) primarily in an effort to reduce

costs. In 2017, Compass told investors this upgrade was “progressing on plan” and that it would

generate $30 million in annual savings for the company beginning in 2018—equivalent to about

a 17% increase in the company’s operating income. These statements were materially

1

Securities Act Rel. No. 11107 (Sept. 23, 2022).

misleading. Goderich’s new mining system was unable to produce enough salt during this

period to save the company money. To the contrary, the production shortfalls caused by the

upgrade required the company to incur additional expenses that substantially increased costs for

Compass, and the company’s experience implementing the upgrade showed this would continue.

Compass did not disclose these facts, which substantially undermined Compass’s statements

about the upgrade.

In early 2018, Compass told investors the upgrade had already saved the company $5

million in 2017. This was not true. While the upgrade had reduced certain expenses by about $1

million, overall, in 2017, the upgrade had instead increased costs that year. During this period,

Compass also misrepresented the amount of salt it was mining and that it was able to produce at

Goderich using the installed CMCH equipment, and failed to disclose as required how the known

and ongoing production shortfalls it was experiencing were reasonably expected to reduce its

future operating income. After Compass disclosed in October 2018 that continuing production

shortfalls at the Goderich mine were significantly impacting its financial results, the company’s

share price declined significantly. In addition to these violations involving Goderich, from the

fourth quarter of 2017 to the first quarter of 2022, Compass failed to adequately assess the

financial consequences of a recently acquired subsidiary’s failures to comply with environmental

regulations in Brazil.

Finally, Compass filed materially misstated financials due to its use of a salt interim

inventory accounting methodology that did not comply with Generally Accepted Accounting

Principles (GAAP).

The Commission ordered the Respondent to pay a $12,000,000.00 civil money penalty to

the Commission. The Commission also created a Fair Fund, pursuant to Section 308(a) of the

Sarbanes-Oxley Act of 2002, so the penalty collected can be distributed to harmed investors (the

“Fair Fund”).

The Fair Fund includes the $12,000,000.00 collected from the Respondent. The assets of

the Fair Fund are subject to the continuing jurisdiction and control of the Commission. The Fair

Fund and has been deposited in a Commission-designated account at the U.S. Department of the

Treasury, and any interest accrued will be added to the Fair Fund.

OPPORTUNITY FOR COMMENT

Pursuant to this Notice, all interested persons are advised that they may obtain a copy of

the Plan from the Commission’s public website at

https://www.sec.gov/litigation/fairfundlist.htm. Interested persons may also obtain a written

copy of the Proposed Plan by submitting a written request to Devon Anthony Brown, United

States Securities and Exchange Commission, 100 F St., N.E. Washington, DC 20549 or

Brownde@SEC.gov. All persons who desire to comment on the Proposed Plan may submit their

comments, in writing, no later than thirty (30) days from the date of this Notice:

1.

to the Office of the Secretary, United States Securities and Exchange

Commission, 100 F Street, NE, Washington, DC 20549-1090;

2.

by using the Commission’s Internet comment form

(https://www.sec.gov/litigation/admin.shtml); or

3.

by sending an e-mail to rule-comments@sec.gov.

Comments submitted by email or via the Commission’s website should include “Administrative

Proceeding File No. 3-21145” in the subject line. Comments received will be publicly available.

Persons should submit only information they wish to make publicly available.

THE PROPOSED PLAN

The Net Available Fair Fund2 is comprised of the $12,000,000.00 in civil money

penalties collected from the Respondent, plus any interest and income earned thereon, less taxes,

fees, and expenses. The Proposed Plan provides for the distribution of the Net Available Fair

Fund to investors who were harmed, by the Respondent’s conduct described in the Order, in

connection with various disclosure violations. As calculated using the methodology detailed in

the Plan of Allocation attached as Exhibit A to the Proposed Plan, investors will be compensated

for their losses on shares of Compass common stock that were purchased or acquired between

March 2, 2017, and October 22, 2018, inclusive, due to the misconduct of the Respondent.

For the Commission, by the Division of Enforcement, pursuant to delegated authority.3

Vanessa A. Countryman

Secretary

2

All capitalized terms used herein but not defined shall have the same meanings ascribed to them in the Proposed

Plan.

3

17 C.F.R. § 200.30-4(a)(21)(iii).