In the Matter of General Cable Corporation (2016)
In the Matter of Karl J. Zimmer (2016)

• Case Name
• In the Matter of General Cable Corporation (2016)
  In the Matter of Karl J. Zimmer (2016)

• Date Filed
• 12/29/2016

• Enforcement Agency
• SEC

• Countries
• Angola, Thailand, China, Indonesia, Bangladesh, Egypt

• Foreign Official
• Unnamed employees and officials from state-owned entities in Angola, Thailand, Indonesia, Bangladesh, China, and Egypt. 

• Date of Conduct
• 2003 to 2015

• Nature of Business
• General Cable Corporation is a publically-traded company based in Highland Heights, Kentucky.  General Cable is a global manufacturer of copper, aluminum, and fiber optic wire and cable products.  General Cable’s common stock is registered with the Commission and trades on the New York Stock Exchange.  Karl J. Zimmer, a resident of Douglas, Georgia, was a Senior Vice President for General Cable’s Europe and Africa Supply Chain and Global Supply Chain.

• Influence to be Obtained
• According to the SEC, between 2003 and 2015, multiple General Cable subsidiaries made improper payments worth approximately $19 million to employees or officials at various state-owned enterprises located in Angola, Thailand, China, Indonesia, Bangladesh, and Egypt.  The SEC claims that the alleged schemes generated illicit profits in excess of $50 million.  According to the SEC, General Cable’s subsidiaries made the improper payments through local agents and distributors, in the form of sales commissions, rebates, discounts, and other fees, who then passed along the payments to foreign government officials.  The SEC also alleged that the improper payments were made despite numerous red flags that the agents and distributors were bribing foreign officials.  In some instances, the SEC claims that even when General Cable became aware of the alleged schemes, it failed to take appropriate action to investigate and ultimately stop the improper practices.
  
  Zimmer was allegedly responsible for approving improper commission payments to a third-party agent (“Agent”) to promote General Cable’s sales to Angolan state-owned enterprises. The SEC claims that Zimmer approved the multiple commissions totaling $342,613 despite knowing that (i) General Cable’s policies prohibited excessive commissions to third parties on sales to state-owned enterprises, (ii) General Cable had commenced an investigation into the Agent, and (iii) General Cable had prohibited past commissions to the Agent while the investigation was pending and without further approval..  

• Enforcement
• On December 29, 2016, the SEC announced that it had resolved an FCPA enforcement action against General Cable for violations of the FCPA’s anti-bribery, books-and-records, and internal controls provisions.  According to the SEC’s cease-and-desist order, General Cable was required to pay disgorgement of $51,174,237 and prejudgment interest of $4,107,660, for a total sanction of $55,281,897.00.  The DOJ separately resolved an enforcement action against General Cable through a non-prosecution agreement that required General Cable to pay a criminal penalty of $20,469,694.80.  In addition, on December 29, 2016, the SEC announced that it had resolved a separate enforcement action against Zimmer for violations of the FCPA.  As part of the SEC’s cease-and-desist order, Zimmer was ordered to pay a $20,000 civil penalty.

• Amount of the Value
• Approximately $19 million (General Cable); Approximately $342,613 (Zimmer).

• Amount of Business Related to Payment
• Approximately $51 million (General Cable); Not Stated (Zimmer).

• Intermediary
• Third-Party Agents, Distributors.

• Citizenship of Parent Entity
• United States

• Total Sanction
• $ 55,281,897

• Compliance Monitor
• No

• Reporting Requirements
• Yes (3 Years)

• Case is Pending?
• No

• Total Combined Monetary Sanction
• $ 75,751,591

• Related Enforcement Actions
• United States v. General Cable Corporation (2016) 
  

General Cable Corporation 

• Citation
• the Matter of General Cable Corporation, Admin. Proc. File No. 3-17755 (Dec. 29, 2016);

• Date Filed
• 12/29/2016

• Filed Under Seal
• No

• FCPA Statutory Provision
• • Anti-Bribery
  • Books-and-Records
  • Internal Controls

• Other Statutory Provision
• None

• Disposition
• Cease-and-Desist Order

• Defendant Jurisdictional Basis
• Issuer

• Defendant's Citizenship
• United States

• Individual Sanction
• $55,281,897 

Karl J. Zimmer 

• Citation
• In the Matter of Karl J. Zimmer, Admin. Proc. File No. 3-17756 (Dec. 29, 2016).

• Date Filed
• 12/29/2016

• Filed Under Seal
• No

• FCPA Statutory Provision
• • Books-and-Records
  • Internal Controls

• Other Statutory Provision
• None

• Disposition
• Cease-and-Desist Order

• Defendant Jurisdictional Basis
• Agent of Domestic Concern

• Defendant's Citizenship
• United States

• Individual Sanction
• $20,000