SEC Charges Marketing and Printing Services Provider with FCPA Violations

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.