Wire and Cable Manufacturer Settles FCPA and Accounting Charges
Wire and Cable Manufacturer Settles FCPA and Accounting Charges
FOR IMMEDIATE RELEASE
2016-283
Washington D.C., Dec. 29, 2016 The Securities and Exchange Commission today announced that Kentucky-based General Cable Corporation agreed to pay more than $75 million to resolve parallel SEC and U.S. Department of Justice investigations related to its violations of the Foreign Corrupt Practices Act (FCPA). The company agreed to pay an additional $6.5 million penalty to the SEC to settle separate accounting-related violations.
According to the SECs orders instituting settled administrative proceedings, General Cables overseas subsidiaries made improper payments to foreign government officials for a dozen years to obtain or retain business in Angola, Bangladesh, China, Egypt, Indonesia, and Thailand. General Cables weak internal controls also failed to detect improper inventory accounting at its Brazilian subsidiary, causing the company to materially misstate its financial statements from 2008 to the second quarter of 2012.
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In the FCPA case, General Cable agreed to pay more than $55 million in disgorgement and interest to the SEC as well as a penalty of nearly $20.5 million in a non-prosecution agreement announced today by the Justice Department. General Cable must self-report its FCPA compliance efforts for the next three years. General Cable neither admitted nor denied the SECs findings while agreeing to pay the $6.5 million penalty to settle the accounting violations. The SEC considered General Cables self-reporting, cooperation, and remedial acts when determining the settlements.
The SEC also charged Karl J. Zimmer, General Cables then-senior vice president responsible for sales in Angola. Zimmer agreed to pay a $20,000 penalty without admitting or denying the SECs findings that he knowingly circumvented internal accounting controls and caused FCPA violations when he approved certain improper payments.
The SECs investigation found no personal misconduct by General Cables former CEO Gregory B. Kenny and former CFO Brian J. Robinson, who returned $3.7 million and $2.1 million in compensation received from the company during the period when the accounting violations occurred. Therefore, it wasnt necessary for the SEC to pursue a clawback action under Section 304(a) of the Sarbanes-Oxley Act.
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