SEC Charges Marketing and Printing Services Provider with FCPA Violations
Quad/Graphics Inc. agreed to pay nearly $10 million to resolve SEC charges that its subsidiaries bribed government officials in Peru and China from 2010 to 2016, concealed sanctioned transactions with a Cuban telecom firm, and failed to maintain adequate internal controls, resulting in a cease-and-desist order and compliance reporting.
Quad/Graphics Inc. violated the Foreign Corrupt Practices Act by having its Peruvian subsidiary bribe government officials to secure contracts and influence judicial outcomes, while also falsifying records to hide illegal dealings with a Cuban telecom company under U.S. sanctions. Its Chinese subsidiary used sham agents to make improper payments to private and government customers between 2010 and 2015 to win business. The SEC found violations of the anti-bribery, books and records, and internal controls provisions of the Securities Exchange Act of 1934, leading to a $6.9 million disgorgement, $959,160 in prejudgment interest, a $2 million civil penalty, and a one-year compliance reporting requirement.
Quad/Graphics Inc., a Wisconsin-based digital and print marketing provider, agreed to pay nearly $10 million to resolve SEC charges related to widespread FCPA violations by its subsidiaries in Peru and China between 2010 and 2016. In Peru, its subsidiary, Quad/Graphics Peru S.A., repeatedly paid or promised bribes to government officials to win contracts and improperly influence a tax dispute, while also creating false records to conceal transactions with a state-controlled Cuban telecommunications company subject to U.S. sanctions. In China, its subsidiary, Quad/Tech Shanghai Trading Company, Ltd., used sham sales agents to make and promise improper payments to employees of both private and governmental customers to secure business. The SEC determined that Quad/Graphics failed to maintain sufficient internal accounting controls, violating the anti-bribery, books and records, and internal controls provisions of the Securities Exchange Act of 1934. Without admitting or denying the allegations, the company consented to a cease-and-desist order and agreed to pay $6,936,174 in disgorgement, $959,160 in prejudgment interest, and a $2 million civil penalty. Additionally, Quad/Graphics committed to self-reporting on its compliance program for one year. The SEC’s investigation was conducted with assistance from the U.S. Department of Justice, the FBI, and the U.S. Attorney’s Office for the Eastern District of Wisconsin.
Exhibits & Attached Documents (1)
Extracted insights
- $10.00M $10 million $10M–$100M
- $6.94M $6,936,174 $1M–$10M
- $2.00M $2 million $1M–$10M
- $959K $959,160 $100K–$1M
- person denise hansberry
- person false records
- person m. shahriar masud
- person peruvian government officials
- company quad/graphics inc.
- company quad/tech shanghai trading company, ltd.
- agency sec's investigation
- person sham sales agents
- Quad/Graphics Inc. agreed to pay $10 million
- Quad/Graphics Inc. violated Foreign Corrupt Practice Act
- Quad/Graphics Peru S.A. paid bribes Peruvian government officials
- Quad/Graphics Peru S.A. created false records
- Quad/Tech Shanghai Trading Company, Ltd. used sham sales agents
- Quad/Tech Shanghai Trading Company, Ltd. made payments employees of private and governmental customers
- Quad/Graphics violated Securities Exchange Act of 1934
- Quad/Graphics consented to cease-and-desist order
- Quad/Graphics agreed to pay $6,936,174 in disgorgement
- Quad/Graphics agreed to pay $959,160 in prejudgment interest
- Quad/Graphics agreed to pay $2 million civil penalty
- Denise Hansberry conducted SEC's investigation
- M. Shahriar Masud conducted SEC's investigation
- Ms. Price supervised SEC's investigation
The Securities and Exchange Commission today announced that Quad/Graphics Inc., a Wisconsin-based digital and print marketing provider, has agreed to pay nearly $10 million to resolve charges that it violated the Foreign Corrupt Practice Act (FCPA) by engaging in multiple bribery schemes in Peru and China. The SEC's order finds that from at least 2011 to January 2016, Quad/Graphics' Peruvian subsidiary, Quad/Graphics Peru S.A., in violation of the FCPA, repeatedly paid or promised bribes to Peruvian government officials to win sales contracts and avoid penalties, and improperly attempted to influence the judicial outcome of a dispute with the Peruvian tax authority. Quad/Graphics Peru S.A. also created false records to conceal transactions with a state-controlled Cuban telecommunications company, which were subject to U.S. sanctions and export controls laws. In addition, the order finds that from 2010 to 2015, Quad/Graphics' China-based subsidiary, Quad/Tech Shanghai Trading Company, Ltd., used sham sales agents to make and promise improper payments to employees of private and governmental customers to secure business. "As a U.S.-listed company expanding abroad, Quad/Graphics failed to ensure that its internal accounting controls were sufficient to prevent the type of widespread bribery in Peru and China and the concealment of commercial sales in Cuba," said Tracy L. Price, Deputy Chief of the SEC's FCPA Unit. The SEC's order finds that Quad/Graphics violated the anti-bribery, books and records, and internal controls provisions of the Securities Exchange Act of 1934. Without admitting or denying the SEC's findings, Quad/Graphics has consented to a cease-and-desist order, and has agreed to pay $6,936,174 in disgorgement, $959,160 in prejudgment interest, and a $2 million civil penalty, for total monetary relief of nearly $10 million. Quad/Graphics also agreed to self-report on its compliance program for a one-year period. The SEC's investigation was conducted by Denise Hansberry and M. Shahriar Masud of the FCPA Unit, and was supervised by Ms. Price. The SEC appreciates the assistance of the U.S. Department of Justice Criminal Division's Fraud Section, the U.S. Attorney's Office for the Eastern District of Wisconsin, and the Federal Bureau of Investigation.
The Securities and Exchange Commission today announced that Quad/Graphics Inc., a Wisconsin-based digital and print marketing provider, has agreed to pay nearly $10 million to resolve charges that it violated the Foreign Corrupt Practice Act (FCPA) by engaging in multiple bribery schemes in Peru and China. The SEC's order finds that from at least 2011 to January 2016, Quad/Graphics' Peruvian subsidiary, Quad/Graphics Peru S.A., in violation of the FCPA, repeatedly paid or promised bribes to Peruvian government officials to win sales contracts and avoid penalties, and improperly attempted to influence the judicial outcome of a dispute with the Peruvian tax authority. Quad/Graphics Peru S.A. also created false records to conceal transactions with a state-controlled Cuban telecommunications company, which were subject to U.S. sanctions and export controls laws. In addition, the order finds that from 2010 to 2015, Quad/Graphics' China-based subsidiary, Quad/Tech Shanghai Trading Company, Ltd., used sham sales agents to make and promise improper payments to employees of private and governmental customers to secure business. "As a U.S.-listed company expanding abroad, Quad/Graphics failed to ensure that its internal accounting controls were sufficient to prevent the type of widespread bribery in Peru and China and the concealment of commercial sales in Cuba," said Tracy L. Price, Deputy Chief of the SEC's FCPA Unit. The SEC's order finds that Quad/Graphics violated the anti-bribery, books and records, and internal controls provisions of the Securities Exchange Act of 1934. Without admitting or denying the SEC's findings, Quad/Graphics has consented to a cease-and-desist order, and has agreed to pay $6,936,174 in disgorgement, $959,160 in prejudgment interest, and a $2 million civil penalty, for total monetary relief of nearly $10 million. Quad/Graphics also agreed to self-report on its compliance program for a one-year period. The SEC's investigation was conducted by Denise Hansberry and M. Shahriar Masud of the FCPA Unit, and was supervised by Ms. Price. The SEC appreciates the assistance of the U.S. Department of Justice Criminal Division's Fraud Section, the U.S. Attorney's Office for the Eastern District of Wisconsin, and the Federal Bureau of Investigation.