Although violations of OFAC sanctions are enforced primarily by the Office of Foreign Assets Control and the Department of Justice, the SEC can also take enforcement action where the conduct violates the books and records provision of the Exchange Act or violates a registrant’s disclosure duties under the federal securities laws.
For example, in September 2019, Quad/Graphics Inc., a Wisconsin-based digital and print marketing provider, paid nearly $10 million to resolve charges that it paid or promised bribes to Peruvian government officials to win sales contracts and avoid penalties and created false records to conceal transactions with a state-controlled Cuban telecommunications company, which were subject to U.S. sanctions and export controls laws.
Certain Quad employees concealed transactions with Cuba in internal emails and falsified books and records to conceal the transactions, including references to a “broker” that were intended to conceal the efforts to use a third party as a pass-through company. As a result of this scheme to hide transactions with Cuba, Quad’s contracts, shipping documents, invoices, and journal entries were inaccurate, thereby violating the books and records provisions of Section 13(b)(2)(A) of the Exchange Act. Those books and records provisions require issuers to make and keep books, records, and accounts which, in reasonable detail, accurately and fairly reflect their transactions and dispositions of the assets of the issuer.
Concealing...
NEWS Spurred by netizens, a domestic investigation found that the company’s listed overseas production address was linked to an unrelated Australian auto shop. A top-selling Chinese health suppleme...