and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities

1 
 
 
UNITED STATES OF AMERICA 
Before the 
SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 87128 / September 26, 2019 
   
ADMINISTRATIVE PROCEEDING 
File No. 3-19531 
 
 
In the Matter of 
 
QUAD/GRAPHICS, INC., 
 
Respondent. 
 
 
ORDER INSTITUTING CEASE-AND-
DESIST PROCEEDINGS PURSUANT TO 
SECTION 21C OF THE SECURITIES 
EXCHANGE ACT OF 1934, MAKING 
FINDINGS, AND IMPOSING A CEASE-
AND-DESIST ORDER  
  
I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-
and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities 
Exchange Act of 1934 (“Exchange Act”), against Quad/Graphics, Inc. (“Quad” or “Respondent”).   
 
II. 
 
 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 
purpose of these proceedings and any other proceedings brought by or on behalf of the 
Commission, or to which the Commission is a party, and without admitting or denying the 
findings herein, except as to the Commission’s jurisdiction over it and the subject matter of these 
proceedings, which are admitted, Respondent consents to the entry of this Order Instituting 
Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, 
Making Findings, and Imposing a Cease-and-Desist Order (“Order”), as set forth below. 

 
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III. 
 
 On the basis of this Order and Respondent’s Offer, the Commission finds
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 that:  
  
Summary 
 1. This matter concerns violations of the Foreign Corrupt Practices Act (the 
“FCPA”) [15 U.S.C. 78dd] by Quad/Graphics, Inc., a marketing solutions and printing services 
provider headquartered in Sussex, Wisconsin.  From at least 2011 to January 2016, Quad 
engaged in multiple bribery schemes to secure business by paying or promising over a million 
dollars in bribes through subsidiaries in Peru and China.  In one bribery scheme, Quad/Graphics 
Peru S.A. (“Quad Peru”), paid or promised bribes to government officials in Peru to win sales 
contracts from the Peruvian National Institute of Statistics and Information (“INEI”) and other 
government municipalities, and to avoid penalties on existing contracts with the Ministry of 
Education (“MINEDU”).  Quad Peru also participated in a judicial bribery scheme when it tried 
to influence the outcome of a tax dispute with the Superintendencia Nacional de Aduanas y de 
Administraciόn Tributaria (“SUNAT”), the Peruvian tax authority, which had imposed over 
$12,000,000 in Value-Added Tax (“VAT”), interest, penalties and fines.  In 2012 and 2013, 
Quad Peru paid over $200,000 in bribes through a local counsel to judges involved in the 
litigation.  In another scheme, from 2010 to 2015, Quad’s subsidiary, Quad/Tech Shanghai 
Trading Company (“Quad/Tech China”), paid or promised approximately $182,000 in improper 
payments to employees of private and government customers through sham sales agents to 
secure business.  Quad employees utilized various means and instrumentalities of U.S. interstate 
commerce to facilitate the bribery schemes in Peru.  
 2. In addition to bribery, Quad Peru also violated U.S. sanctions and export control 
laws by engaging in commercial transactions with a state controlled Cuban telecommunications 
company, Empresa de Telecomunicaciones de Cuba S.A. (“ETECSA”), and violated the FCPA’s              
books and records provisions by creating false records to conceal the transactions.  Generally, 
these sanctions and export control laws prohibit business transactions with sanctioned countries 
that involve U.S. persons, companies or goods.  None of Quad’s improper payments in Peru or 
China were accurately reflected in its books and records and Quad failed to have sufficient 
internal accounting controls in place to detect or prevent the various misconduct.  Quad was 
unjustly enriched by approximately $7 million as a result of these schemes. 
      Respondent 
 3. Quad/Graphics, Inc. is a publicly traded marketing solutions and printing services 
provider  headquartered  in  Sussex,  Wisconsin,  with  operations  in 10 countries.  Since  2010, 
Quad’s common stock has been registered in the United States pursuant to Section 12(b) of the 
Exchange Act.  It trades on the NYSE under the ticker “QUAD” and files  periodic  reports, 
                                                 
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  The findings herein are made pursuant to Respondent's Offer of Settlement and are not  
binding on any other person or entity in this or any other proceeding.   
 

 
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including Forms 10-K, with the Securities and Exchange Commission as required under Section 
13(a) of the Exchange Act.   
Relevant Entities 
 4. Quad/Graphics Peru S.A. (“Quad Peru”), formerly known as World Color Peru, is 
a wholly owned subsidiary of Quad.  The Lima, Peru, plant specializes in printing and 
assembling packets for educational textbooks and exams.  It also prints directories, magazines, 
catalogs and retail inserts.  It also prints and publishes board books and telephone directories.  
During the relevant period, Quad Peru’s books and records were consolidated into the financial 
statements of Quad.   
 5. Quad/Tech Shanghai Trading Company, Ltd. (“Quad/Tech China”) was a wholly-
owned subsidiary of Quad/Graphics, Inc.  Quad/Tech China sold automated systems for 
commercial, newspaper, packaging and publication printers.  During the relevant period,      
Quad /Tech China’s books and records were consolidated into the financial statements of Quad.  
                                                                    FACTS 
                                                              BACKGROUND 
 6. Prior to 2010, Quad was a privately held printing company headquartered in 
Sussex, Wisconsin, with a focus on domestic sales.  With the July 2010 acquisition of World 
Color Press, Inc. (“World Color”), a Canadian printing company, Quad quickly became a public 
company with a major international presence.  Quad acquired over 16,000 World Color 
employees, several subsidiaries, and multiple plants throughout Latin America, and its common 
shares began trading on the NYSE.  Despite becoming a publicly traded company with a large 
global workforce and operations in high risk areas, Quad’s compliance program was almost non-
existent in 2010.  At the time, Quad failed to implement sufficient internal accounting controls or 
anti-corruption policies and procedures and failed to conduct meaningful due diligence on third 
parties.  Likewise, internal audit had no visible role in anti-corruption testing and the company 
failed to conduct broad FCPA or ethics training until approximately 2012.  It appointed its first 
Director of Compliance, an individual with no compliance experience or training and an 
information technology background, in 2011.   
 7. From at least 2011 to 2016, Quad’s failure to implement a robust compliance 
program and maintain sufficient internal accounting controls contributed to ongoing bribery 
schemes in Peru to obtain business and win favorable outcomes in tax litigation.  The schemes 
were facilitated through third party vendors.  Quad’s then Operations Executive for Latin 
America and a then Finance Executive for Latin America, both based in the U.S., either ignored 
significant red flags or participated in the misconduct.  These failures also allowed Quad/Tech 
China’s bribery of customers to facilitate systems sales to continue from 2010 to 2015, and Quad 
Peru’s sanctions violations in connection with the sale of goods to Cuba in 2012.  None of the 
improper payments were accurately reflected in Quad’s books and records and its internal 
accounting controls were not reasonably designed to detect or prevent them.   

 
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Bribery to Secure Sales in Peru 
 8.  In 2011, Quad Peru’s former Head Sales Executive was approached by an 
individual with influence in the Peruvian government who requested that Quad Peru pay him a 
“commission” in exchange for a government contract with INEI, one of Quad Peru’s largest 
customers.  Quad Peru’s Head Sales Executive obtained verbal approval to pay the bribe from 
Quad Peru’s former General Manager.  Thereafter, from 2011 to 2016, Head Sales Executive 
continued to make payments with the expectation that bribes would be paid to government 
officials to secure contracts, primarily with INEI, and also to other officials at government 
municipalities in Peru.  The improper payments were made through four purported third party 
vendors, which were sham companies owned by the same individual (“Sham Vendors”).   
 9. The four Sham Vendors were all registered in Lima, Peru, three with the same 
address, and had no real business operations.  The Sham Vendors were used to pay bribes to both 
government officials and private customers on behalf of Quad Peru.  Quad failed to conduct any 
due diligence on the Sham Vendors.   
 10.  Most of the invoices submitted by the Sham Vendors were purportedly for pre-
press, modulation and/or packaging services provided to Quad Peru in connection with INEI 
contracts.  In truth, none of the Sham Vendors performed any such services for Quad Peru.  
Instead, pre-press, modulation and packaging services were performed on site by Quad Peru 
employees or by unrelated external third parties.      
 11. The bribes that Quad Peru paid to INEI officials were approximately 13% of each 
government contract work order and were paid through fake invoices for services submitted by 
the Sham Vendors that were routinely approved by the Quad Peru Head Sales Executive and the 
Quad Peru General Manager.  
 12. Quad Peru’s then Senior Finance Manager was aware of the improper 
commission payments.  He ensured that the related invoices from the Sham Vendors were paid 
after the Head Sales Executive and General Manager approved them.  As the volume of improper 
payments increased, the Senior Finance Manager became increasingly concerned about 
authorizing them.  He expressed his concerns to the General Manager but was brushed aside.   
 13. In approximately 2013, the Senior Finance Manager, with another Manager 
present, contacted a Finance Executive for Latin America who was based in the United States to 
discuss the improper conduct.  The Finance Executive advised the Peru Senior Finance Manager 
not to forward any invoices directly to him and stated he would look into the matter.  Despite this 
reassurance, the Senior Finance Manager never heard back from the Finance Executive on the 
subject and no follow up occurred.  The improper commissions continued to be paid by wire 
transfers to accounts held by the Sham Vendors at various Peruvian banks or by checks that were 
hand delivered to the Sham Vendor’s principal or the Sham Vendor’s accountant in Peru.  

 
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 14. In addition to using the Sham Vendors to pay bribes to government officials to 
secure contracts, Quad Peru also used them to pay bribes to employees of private customers from 
at least 2013 to 2015 to secure business.  
 15. In December 2014, the Finance Executive received additional notice of costs 
related to two of the Sham Vendors, when the Senior Finance Manager for Quad Peru emailed a 
copy of Quad Peru’s standard monthly presentation for November 2014, to Quad in the U.S. for 
review as Quad was closely monitoring costs at Quad Peru.  The presentation contained a 
detailed analysis of Quad Peru’s November operating results and identified large vendor costs 
for the two Sham Vendors.  In fact, Quad Peru’s second and third largest costs that period were 
due to fake invoices submitted by these vendors.  Despite the Finance Executive’s previous 
conversation with the Senior Finance Manager, the Finance Executive failed to inquire about the 
vendor costs and Quad Peru continued to pay additional bribes through phony invoices submitted 
by the Sham Vendors.    
 16. Quad Peru’s Senior Finance Manager eventually left the company in 2015.  In late 
2015, a new Senior Finance Manager was hired from outside Quad.  Once the new Senior 
Finance Manager was in place, two concerned managers in Peru approached him about several 
suspicious invoices that had recently been submitted by two of the Sham Vendors.  Several of 
the invoices contained red flags, including having the same date and dollar amounts, and 
consecutive invoice numbers.  Upon review, the new Senior Finance Manager agreed the 
invoices were problematic and declined to approve them.  In January 2016, the Quad Peru Senior 
Finance Manager reported the matter to the Finance Executive, the same individual who, years 
earlier, was notified of similar suspicious payments by Quad Peru’s former Senior Finance 
Manager.  After hearing from the new Senior Finance Manager, the Finance Executive reported 
the suspicious payments to his supervisor and then to Quad’s U.S. Legal Department. 
 17. In all, from at least 2011 to January 2016, Quad Peru paid or promised over $1 
million in bribes through the Sham Vendors to secure contracts by which Quad was unjustly 
enriched by over $4.4 million. 
 18. From 2011 through 2015, the Head Sales Executive and the General Manager of 
Quad Peru also used the Sham Vendors to pay over $117,000 in bribes to government officials at 
MINEDU to reduce penalties and extend the delivery dates on certain existing contracts in order 
to avoid defaulting on contracts with MINEDU.  From June 2011 to May 2013, Quad Peru paid 
over $45,000 in additional bribes to MINEDU officials in order to avoid penalties for failure to 
meet the terms of existing contracts with MINEDU.  These payments were made through a slush 
fund that was created with the assistance of seven other third party vendors.  As a result of this 
misconduct, Quad was unjustly enriched by over $970,000. 
 19. The bribe payments were falsely recorded in Quad’s books and records, primarily 
as pre-press or related services.  Quad lacked a system of internal accounting controls sufficient 
to detect or prevent the payments despite the presence of numerous red flags, including vendor 
invoices with rounded dollar amounts, large invoice amounts that were disproportionate to the 

 
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services described, invoices that were consecutively numbered (sometimes with the same date) 
and invoices without purchase orders or other supporting documentation. 
 20. In addition, though Quad began providing some FCPA and anti-corruption 
training in Latin America in approximately 2012, it was not taken seriously by certain Quad 
Latin America employees.  High level Latin America executives failed to support the effort, as 
illustrated by one management meeting in Peru where sales performance issues were discussed, 
and the Operations Executive for Latin America alluded to bribery when he joked that everything 
about Quad Peru’s operations could be changed except the Head Sales Executive, because he 
was the key to contracts with MINEDU, presumably due to his corrupt efforts to win those sales.      
Judicial Bribery Scheme in Peru 
 21. During 2012 and 2013, Quad Peru also engaged in a judicial bribery scheme in 
Peru.  Starting in approximately 2000, SUNAT, the Peruvian tax authority, assessed what 
ultimately totaled over $12,000,000 in VAT, interest, penalties and fines against Quad Peru for 
failure to pay VAT on certain book sales to MINEDU.  Quad Peru (formerly World Color Peru) 
filed a complaint against SUNAT to challenge the tax assessment, and engaged in litigation that 
lasted for years.  As the amount in dispute grew over time, the potential loss of over $12,000,000 
for unpaid VAT was a concern for Quad.  It was essentially the equivalent of approximately two 
years of profit for Quad Peru. 
 22.  In April 2010, Quad Peru retained a local Peruvian law firm to serve as outside 
counsel on the SUNAT litigation.  Quad Peru paid the law firm a monthly fee of approximately 
$1,000 to $1,200 for routine services related to the litigation.   
 23. Sometime around 2011, after setbacks in the litigation and at the law firm’s 
suggestion, Quad Peru’s management agreed to use the law firm to facilitate the payment of 
bribes to Peruvian judges to try to influence their decisions on the SUNAT litigation.  Quad 
Peru’s management obtained approval from the Operations Executive, based in the United 
States, to engage in the judicial bribery scheme.   
 24. The first bribe occurred in approximately 2011, when Quad Peru’s Senior Finance 
Manager arranged for payment of $20,000 to the law firm for purposes of bribing a judge.  The 
Senior Finance Manager obtained the $20,000 by having approximately two or three third party 
vendors, which had previously provided legitimate services, submit fake invoices.  Quad Peru 
paid the invoices and once the vendors received payment they returned some portion of the 
money to Quad Peru’s former Head Sales Executive and the Senior Finance Manager.  The 
Senior Finance Manager then used the money to pay the law firm.  The third party vendors took 
part in the scheme so that Quad Peru would continue to hire them to perform other legitimate 
services.  The Senior Finance Manager personally delivered the $20,000 in cash to the law firm’s 
office in Lima, Peru, for onward payment to a judge.    
 25. Around the time that the bribe was paid, Quad had a significant victory in the 
SUNAT litigation.  In October 2011, the Litigation Court in Lima ruled in Quad Peru’s favor on 

 
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the VAT issue.  The Court ruled that Quad Peru’s dispute of SUNAT’s tax assessment was 
founded.  However, SUNAT appealed the ruling and also challenged a previous injunction 
barring it from seizing Quad Peru’s assets while the lawsuit was pending. 
 26. In March 2012, the court cleared the way for SUNAT to seize Quad Peru’s assets, 
including its cash and accounts receivables.  Quad Peru’s operational infrastructure and 
materials, including its operating plant and other real property, also became subject to seizure.  
 27. On July 24, 2012, Quad Peru signed a “success fee” contract with the law firm 
agreeing to pay the law firm a maximum of $208,000 if the law firm successfully defended Quad 
Peru in the ongoing SUNAT dispute.   
 28. From September 2012 to late December 2012, SUNAT seized approximately 
$4.49 million from Quad Peru’s bank accounts.  In addition, SUNAT seized approximately $7 
million in cash receivables.             
 29. On or about December 11, 2012, with approval from the Operations Executive in 
the U.S., Quad Peru agreed to pay the law firm an “extraordinary” fee so that the law firm could 
use the funds to bribe a judge and stop the seizure of Quad Peru’s bank accounts and assets.  The 
bribe initially seemed successful, as two days later, on December 13, 2012, the Administrative 
court granted Quad Peru’s request for a preliminary injunction contingent on the provision of a 
bank guarantee by Quad Peru of the full amount owed.  SUNAT appealed and the litigation 
continued. 
 30. On December 14, 2012, the law firm issued an invoice to Quad Peru for $50,504 
describing its services as “advice during the coercive execution process and in obtaining a 
precautionary measure.”  Quad Peru’s Senior Finance Manager signed off on the invoice and 
paid it the same day. 
 31. Quad’s documents and internal emails also referred to the bribe payments as  
“extraordinary fees.”  This fee and later fees called “extraordinary” were in addition to the 
normal monthly payments made to the law firm.   
 32. In April 2013, the law firm issued an invoice for $407,100 to fund additional 
bribes to judges.  Unwilling to take sole responsibility for the very large payment to the law firm, 
the Senior Finance Manager of Quad Peru forwarded the invoice by email to the Finance 
Executive, who was based in the U.S., for payment approval.  The Finance Executive then 
forwarded the invoice to the Operations Executive who was also in the U.S. and who also had 
knowledge of the bribery scheme.  After discussing the $407,100 invoice with the Operations 
Executive, the Finance Executive told the Senior Finance Manager to pay the invoice, despite the 
possibility the money would be used for bribery.   
 33. Days later, Quad Peru wired a portion of the invoice amount, $230,000, to the law 
firm.  Payment was wired from Quad Peru’s Miami, Florida bank account, an account typically 
used to pay for supplies, not attorney’s fees.  Quad’s Finance Executive told the Senior Finance 

 
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Manager how to account for the payment in Quad Peru’s books and records due to his concern 
about it appearing in variance reports. 
 34. On or about June 7, 2013, the law firm refunded $173,181, roughly two thirds of 
the original $230,000 payment, to Quad Peru, keeping approximately $56,819.  The law firm 
refunded the money because its attempt to bribe the appellate judges in charge of SUNAT’s 
appeal was unsuccessful.  This became evident days later on or about June 10, 2013, when 2 of 
the 3 appellate judges considering Quad Peru’s appeal voted in favor of SUNAT.     
 35. Between 2012 and 2013, SUNAT seized approximately $11.89 million.  In 
October 2013, Quad Peru made another payment of approximately $108,488 to the law firm.  
According to the invoice submitted by the law firm, the payment was a “contentious 
administrative procedure success fee related to SUNAT.”  The payment did not relate to any 
“success” on the part of the law firm.  Instead it related, at least in part, to the law firm’s 
assistance with the judicial bribery scheme.  In all, Quad Peru made improper payments of 
approximately $209,752 to the law firm in connection with the failed judicial bribery scheme.   
 36. Ultimately, in the summer of 2014, SUNAT won its appeal of the lower court 
ruling in favor of Quad Peru.  On or about November 3, 2014, Quad Peru filed an appeal of the 
decision with the Peruvian Supreme Court.  The litigation finally concluded on or about March 
20, 2018, when the Peruvian Supreme Court decided the case in favor of Quad Peru.  
Quad Conceals its Sales Transactions in Cuba  
 37. Before World Color, a Canadian company, was acquired by Quad in 2010, it 
regularly conducted business with Cuba.  One of its largest clients was ETECSA, a state owned 
telecommunications company that purchased telephone directories from World Color Peru.   
Despite existing U.S. sanctions and export control laws, sales to Cuba continued after World 
Color’s acquisition by Quad.  
 
38. Certain Quad employees, including members of management in Peru and the 
former Operations Executive based in the U.S., concealed transactions with Cuba in internal emails 
and correspondence discussing the contract negotiations, financing arrangements, shipping and 
printing.  Additional books and records were falsified to conceal the transactions, including 
references to “broker” that were intended to conceal the efforts to use a third party as a pass 
through company.   As a result of the conduct, Quad’s contracts, shipping documents, invoices, 
and journal entries were inaccurate.   
 
39. In October 2010, Quad Peru signed a contract with ETECSA to print and sell 
Cuban telephone directories for approximately $1.2 million.  Quad Peru arranged the sale even 
though it was prohibited by U.S. sanctions and export control laws.  In early 2011, Quad Peru 
shipped the telephone directories to ETECSA.  
 
40. Knowing that sales to ETECSA were barred by U.S. sanctions, the Operations 
Executive and Quad Peru’s General Manager and Senior Finance Manager sought to conceal the 

 
 9 
2010 Cuba sale from other executives in the U.S.  In an email dated March 8, 2011, the Operations 
Executive cautioned Quad Peru’s Senior Finance Manager, its General Manager and several other 
Quad Peru employees that “[t]he USA legal department requested that we do not mention the word 
CUBA in our reports. This is a legal matter in the USA and at times our reports get to them.”  The 
Operations Executive recommended using the initials of the customer, ETECSA, in reports instead.     
 
41. Around the same time, in early March 2011, the Operations Executive sent e-mails 
to the Senior Finance Manager asking whether Quad Peru had sent invoices to ETECSA in 2011, 
and also whether there was a plan to use a broker in the future.  The Senior Finance Manager 
responded that invoices for approximately $1.1 million had already been sent to ETECSA in 2011, 
and that they would use a Peruvian Agent as a broker going forward.   
 42. By this time, members of management in Quad Peru and Latin America had 
developed a scheme through which Quad Peru attempted to conceal its sale to ETECSA by 
making it appear on its books and records that it had sales to a Peruvian Agent.  In fact, the 
Peruvian Agent was not a true customer but a pass through company used to conceal Quad’s 
sales of telephone directories to Cuba.  
 43. On or about April 11, 2011, Quad’s Legal Department emailed the Operations 
Executive explaining that U.S. law prohibited trade between U.S. companies and Cuba.  The 
Legal Department added that as a result of the acquisition of World Color, Latin American 
subsidiaries could no longer sell products or provide services to customers in Cuba.  Lastly, the 
Legal Department asked the Operations Executive to confirm that Quad Peru was no longer 
selling or providing products or services to ETECSA.   
 44. Despite knowing from prior communications with Quad Peru’s Senior Finance 
Manager that Peru planned to continue unlawful sales to Cuba using the Peruvian Agent as a 
broker, the Operations Executive purposely misled the Legal Department, writing: “I verified 
this last month.  I confirm Peru is no longer producing any work for Cuba....They were also 
instructed not to accept any work from [C]uban customers.”   
 45. On February 24, 2012, Quad Peru signed a purported sales contract with the 
Peruvian Agent, to print telephone directories for ETECSA in Cuba for the period 2012-2013, 
when in fact it was a sale between Quad Peru and ETECSA, with Quad Peru providing the 
telephone directories.  The Peruvian Agent was described as an intermediary for the sale and also 
provided pre-press services.  The Peruvian Agent submitted sham invoices to Quad Peru and 
received payment in 2012 and 2013.   
 46. On March 12, 2012, the Peruvian Agent signed a contract with ETECSA to 
publish the telephone directories.  The Peruvian Agent then hired Quad Peru as a subcontractor.  
Quad Peru printed, packaged, and arranged for shipment of the directories to Cuba.  Thus, the 
Peruvian Agent was simply a pass through to avoid the Legal Department’s advice on U.S. 
sanctions.     

 
 10 
 47. From approximately February 18 to 29, 2012, Quad Peru also paid hotel bills for 
ETECSA employees who visited Peru to review sample telephone directories and oversee the 
start of the 2012 printing and packaging project.  Additionally, from approximately April 8, 
2010, to July 1, 2012, Quad Peru sales representatives also traveled to Cuba multiple times to 
meet with ETECSA officials to discuss the pending printing project for ETECSA.   
 48. Months later in approximately September 2012, during a risk assessment in Peru 
conducted by the company’s compliance group and its external accounting consultants, 
executives in the U.S. learned about the improper 2012 sale to Cuba.  Despite learning of the 
sale, executives in the U.S failed to put adequate internal accounting controls and trade 
compliance measures in place to ensure that no additional work was conducted with ETECSA or 
other sanctioned countries.  To the contrary, the illegal sale in 2012 was completed with the 
knowledge and approval of Quad’s Operations Executive. 
 49. In August 2013, despite knowing by this time that sales to Cuba were prohibited, 
Quad Peru employees opted to bid on yet another contract with ETECSA for the sale of 2014 
telephone directories.  Quad Peru won the bid in September 2013, but subsequently withdrew it 
in October 2013, because of U.S. sanctions. 
 50. The revenue from the 2012 sale to ETECSA was falsely recorded in Quad Peru’s 
books and records as a sale to Peruvian Agent.  Quad’s illicit gain on the sale to ETECSA was 
approximately $200,000. 
 Bribery to Secure Sales in China 
 51. In addition to the improper conduct in Peru, from 2010 to 2015, bribes were 
promised and paid by Quad’s China based subsidiary, Quad/Tech China, to employees of state 
owned entities and private customers through sham sales agents to win business.   
 52. During the relevant period, Quad/Tech China sold and serviced systems that 
attached to printing machinery.  The systems were designed to improve the quality and 
efficiency of printing presses utilized by customers.  Most of Quad/Tech China’s customers were 
Original Equipment Manufacturers (“OEMs”) and press end users.  Quad/Tech China’s clients 
were in traditional (e.g. newspapers) and packaging printing and its focus was on the packaging 
side of the market.      
 53. Since there were only a handful of OEMs selling printing presses in China and an 
equally small number of press end users, Quad/Tech China’s potential customer base was small.  
Sotech Machinery Co. Ltd. (“Sotech”), an OEM specializing in packaging printing equipment, 
mostly for the cigarette industry, was one of Quad/Tech China’s largest customers.  Another 
large OEM and customer was Shaanxi Beiren (“Shaanxi Beiren”) Printing Machinery Co. Ltd., a 
state owned entity and manufacturer of printing, decorating and packaging machinery.       
 54. From at least 2010 to July 2015, Quad/Tech China promised or paid commissions 
to sales agents who then passed some portion of the payments on to employees of OEMs and end 
users at private and public companies in China.  The payments were made to induce customers to 

 
 11 
purchase Quad/Tech China’s systems.  Illicit payments were made to Chinese officials at 
Shaanxi Beiren and to employees of Sotech to win sales. 
 55. The fake commissions that Quad/Tech China paid to sales agents to make illicit 
payments were generally 2% of sales order values and were typically described on invoices as 
“technical service fees.”  The identities of the sham sales agents were kept secret from most 
Quad/Tech China employees.  They did not provide any bona fide services and were not 
involved in any business operations at Quad/Tech China.  They simply invoiced Quad/Tech 
China for a 2% commission and then transferred payment to customer employees in return for 
Quad/Tech obtaining a contract. 
 56. The improper payments were largely facilitated by a former Quad/Tech China 
Sales Executive in charge of the package printing business in China.  Quad/Tech China’s then 
General Manager and its then Finance Manager were also aware of the payments to the sham 
sales agents.  All three employees were based in China.   
 57. The total amount of improper commissions that Quad/Tech China paid or 
promised to sales agents in China was approximately $182,000.     
 58. Quad/Tech China did not do any due diligence on the sham sales agents and no 
proof of services performed were provided before their invoices were paid.    Quad failed to 
provide adequate oversight and auditing of Quad/Tech China.  In addition, Quad/Tech China 
employees were inadequately trained on the company’s anti-corruption policies.  The improper 
payments were falsely recorded in Quad’s books and records as “commissions” and Quad failed 
to devise and maintain a system of internal accounting controls sufficient to detect or prevent the 
improper payments.  Quad/Tech China was unjustly enriched by approximately $1,087,322 as a 
result of the improper payments in China.  
Legal Standards and Violations 
 59. Under Section 21C of the Exchange Act, the Commission may impose a cease-
and desist order upon any person who is violating, has violated, or is about to violate any 
provision of the Exchange Act or any rule or regulation thereunder, and upon any other person 
that is, was, or would be a cause of the violation, due to an act or omission the person knew or 
should have known would contribute to such violation.  
 60. As a result of conduct described above in Peru, Quad violated Section 30A of the 
Exchange Act, which in relevant part makes it unlawful for an issuer with securities registered 
under Section 12 of the Exchange Act or which is required to file reports under Section 15(d) of 
the Exchange Act, or any employee or agent acting on its behalf, to make use of the mails or any 
means or instrumentality of interstate commerce corruptly in furtherance of an effort to pay or 
offer to pay anything of value to foreign officials for the purpose of influencing their official 
decision-making, in order to assist in obtaining or retaining business.  Each Quad subsidiary 
described above was an “agent” of Quad within the meaning of the Foreign Corrupt Practices 
Act.   

 
 12 
 61. As a result of the conduct described above, Quad violated Section 13(b)(2)(A) of 
the Exchange Act, which requires 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.   
 62. As a result of the conduct described above, Quad violated Section 13(b)(2)(B) of 
the Exchange Act, which requires issuers to devise and maintain a system of internal accounting 
controls sufficient to provide reasonable assurances that (i) transactions are executed in 
accordance with management’s general or specific authorization; (ii) transactions are recorded as 
necessary (I) to permit preparation of financial statements in conformity with generally accepted 
accounting principles or any other criteria applicable to such statements, and (II) to maintain 
accountability for assets; (iii) access to assets is permitted only in accordance with 
management’s general or specific authorization; and (iv) the recorded accountability for assets is 
compared with the existing assets at reasonable intervals and appropriate action is taken with 
respect to any differences.   
Quad’s Self-Disclosure, Cooperation, and Remedial Efforts 
 63. In determining to accept the Offer, the Commission considered Respondent’s self-
disclosure, cooperation and remedial efforts.  Quad voluntarily disclosed the misconduct.  The 
company’s cooperation included sharing facts developed during the course of its own internal 
investigation, producing documents and other materials (including documents from overseas), 
translating key documents, summarizing findings of internal investigations, providing summaries 
of witness interviews, and assisting in making current and former employees available for 
interviews. 
 64. Quad’s remedial actions included: (i) terminating employees involved in the 
improper conduct; (ii) enhancing the role and resources within the compliance department; (iii) 
hiring a new International Trade Compliance Manager; (iv) ongoing recruitment for, and training 
of, new compliance and internal audit personnel with anti-corruption expertise; (v) completing a 
root-cause analysis and implementing several internal controls enhancements; (vi) updating its 
code of conduct to further address FCPA issues; and (vii) updating policies and procedures 
designed to ensure appropriate risk assessments and integration plans are developed for newly 
acquired entities. 
Undertakings 
65. Respondent undertakes to:  
Report to the Commission staff periodically during a one-year term, the status of its 
remediation and implementation of compliance measures, particularly as to anti-corruption risk 
assessments and integration of acquired entities, staffing and budgeting for compliance and 
internal audit, and due diligence and monitoring of payments to third-parties. During this period, 
should Respondent discover credible evidence, not already reported to Commission staff, that 
questionable or corrupt payments or questionable or corrupt transfers of value may have been 
offered, promised, paid, or authorized by Respondent, or any entity or person acting on behalf of 

 
 13 
Respondent, or that related false books and records have been maintained, Respondent shall 
promptly report such conduct to the Commission staff. During this one-year period, Respondent 
shall: (1) conduct an initial review and submit an initial report and (2) conduct and prepare one 
follow-up review and report, as described below:  
 
a. Respondent shall submit to the Commission staff a written report within 180 
calendar days of the entry of this Order setting forth a complete description of its 
FCPA and anti-corruption related remediation efforts to date for ensuring 
compliance with the FCPA and other applicable anti-corruption laws, and the 
parameters of the subsequent review (the “Initial Report”). The Initial Report 
shall be transmitted to Tracy Price, Deputy Chief, FCPA Unit, United States 
Securities and Exchange Commission, 100 F Street, NE, Washington, DC, 20549-
5631. Respondent may extend the time period for issuance of the Initial Report 
with prior written approval of the Commission staff. 
b. Respondent shall undertake one follow-up review, incorporating any comments 
provided by the Commission staff on the previous report, to further monitor and 
assess whether the policies and procedures and remediation efforts of Respondent 
are reasonably designed and implemented to detect and prevent violations of the 
FCPA and other applicable anti-corruption laws (the “Follow-Up Report”).  
c. The Follow-up Report shall be completed by no later than 180 days after the 
Initial Report.  Respondent may extend the time period for issuance of the 
Follow-up Report with prior written approval of the Commission staff.  
d. The periodic reviews and reports submitted by Respondent will likely include 
proprietary, financial, confidential, and competitive business information. Public 
disclosure of the reports could discourage cooperation, impede pending or 
potential government investigations and thus undermine the objectives of the 
reporting requirement. For these reasons, among others, the reports and the 
contents thereof are intended to remain and shall remain nonpublic, except (a) 
pursuant to court order, (b) as agreed by the parties in writing, (c) to the extent 
that the Commission staff determines in its sole discretion that disclosure would 
be in furtherance of the Commission’s discharge of its duties and responsibilities, 
or (d) is otherwise required by law.  
e. During this one-year period of review, Respondent shall provide its external 
auditors with its annual internal audit plan and reports of the results of internal 
audit procedures and its assessment of its FCPA compliance policies and 
procedures. 
f. During the one-year period of review, Respondent shall provide Commission staff 
with any written reports or recommendations provided by Respondent’s external 
auditors in response to Respondent’s annual internal audit plan, reports of the 

 
 14 
results of internal audit procedures, and its assessment of its FCPA compliance 
policies and procedures. 
g. Certify, in writing, compliance with the undertaking(s) set forth above.  The 
certification shall identify the undertaking(s), provide written evidence of 
compliance in the form of a narrative, and be supported by exhibits sufficient to 
demonstrate compliance.  The Commission staff may make reasonable requests for 
further evidence of compliance, and Respondent agrees to provide such evidence.  
The certification and supporting material shall be submitted to Tracy L. Price, 
Deputy Chief, FCPA Unit, with a copy to the Office of Chief Counsel of the 
Enforcement Division, no later than sixty (60) days from the date of the completion 
of the undertakings. 
IV. 
 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 
agreed to in Respondent Quad’s Offer.  Accordingly, it is hereby ORDERED that:  
A. Pursuant to Section 21C of the Exchange Act, Respondent Quad cease-and-desist 
from committing or causing any violations and any future violations of Sections 30A, 
13(b)(2)(A) and 13(b)(2)(B)  of the Exchange Act [15 U.S.C. §§ 78m(b)(2)(A), 78m(b)(2)(B), 
and 78dd-1].  
  
B. Respondent shall comply with its Undertakings as enumerated in paragraph 65 
above.   
  
C. Respondent shall, within fourteen days of the entry of this Order, pay 
disgorgement of $6,936,174, prejudgment interest of $959,160, and a civil penalty of 
$2,000,000, for total payment of $9,895,334 to the Securities and Exchange Commission for 
transfer to the general fund of the United States Treasury, subject to Exchange Act Section 
21F(g)(3).  If timely payment of disgorgement and prejudgment interest is not made, additional 
interest shall accrue pursuant to SEC Rule of Practice 600.  If timely payment of the civil penalty 
is not made, additional interest shall accrue pursuant to 31 U.S.C. §3717.   
 
Payment must be made in one of the following ways:     
  
(1) Respondent may transmit payment electronically to the Commission, 
which will provide detailed ACH transfer/Fedwire instructions upon request;  
  
(2) Respondent may make direct payment from a bank account via Pay.gov 
through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or   
  

 
 15 
(3) Respondent may pay by certified check, bank cashier’s check, or United 
States postal money order, made payable to the Securities and Exchange 
Commission and hand-delivered or mailed to:   
 
Enterprise Services Center  
Accounts Receivable Branch  
HQ Bldg., Room 181, AMZ-341  
6500 South MacArthur Boulevard  
Oklahoma City, OK 73169  
  
  Payments by check or money order must be accompanied by a cover letter identifying 
Quad as a Respondent in these proceedings, and the file number of these proceedings; a copy of 
the cover letter and check or money order must be sent to Tracy L. Price, Deputy Chief, FCPA 
Unit, Division of Enforcement, Securities and Exchange Commission, 100 F St., NE, 
Washington, DC 20549-5631.  
 
D. Amounts ordered to be paid as civil money penalties pursuant to this Order shall 
be treated as penalties paid to the government for all purposes, including all tax purposes.  To 
preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 
Action, it shall not argue that[it is entitled to, nor shall it benefit by, offset or reduction of any 
award of compensatory damages by the amount of any part of Respondent’s payment of a civil 
penalty in this action ("Penalty Offset").  If the court in any Related Investor Action grants such 
a Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order 
granting the Penalty Offset, notify the Commission's counsel in this action and pay the amount of 
the Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be 
deemed an additional civil penalty and shall not be deemed to change the amount of the civil 
penalty imposed in this proceeding.  For purposes of this paragraph, a "Related Investor Action" 
means a private damages action brought against Respondent by or on behalf of one or more 
investors based on substantially the same facts as alleged in the Order instituted by the 
Commission in this proceeding. 
  

 
 16 
 
E. Respondent acknowledges that the Commission is not imposing a civil penalty in 
excess of $2,000,000 based upon its cooperation in a Commission investigation and related 
enforcement action.  If at any time following the entry of the Order, the Division of Enforcement 
(“Division”) obtains information indicating that Respondent knowingly provided materially false 
or misleading information or materials to the Commission, or in a related proceeding, the 
Division may, at its sole discretion and with prior notice to the Respondent, petition the 
Commission to reopen this matter and seek an order directing that the Respondent pay an 
additional civil penalty.  Respondent may contest by way of defense in any resulting 
administrative proceeding whether it knowingly provided materially false or misleading 
information, but may not:  (1) contest the findings in the Order; or (2) assert any defense to 
liability or remedy, including, but not limited to, any statute of limitations defense. 
  
  By the Commission.  
  
  
  
Vanessa A. Countryman 
Secretary 
 
 
 
 
 

1 

 

 

UNITED STATES OF AMERICA 

Before the 

SECURITIES AND EXCHANGE COMMISSION 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 87128 / September 26, 2019 

   

ADMINISTRATIVE PROCEEDING 

File No. 3-19531 

 

 

In the Matter of 

 

QUAD/GRAPHICS, INC., 

 

Respondent. 

 

 

ORDER INSTITUTING CEASE-AND-

DESIST PROCEEDINGS PURSUANT TO 

SECTION 21C OF THE SECURITIES 

EXCHANGE ACT OF 1934, MAKING 

FINDINGS, AND IMPOSING A CEASE-

AND-DESIST ORDER  

  

I. 
 

 The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-

and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities 

Exchange Act of 1934 (“Exchange Act”), against Quad/Graphics, Inc. (“Quad” or “Respondent”).   

 

II. 
 

 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 

purpose of these proceedings and any other proceedings brought by or on behalf of the 

Commission, or to which the Commission is a party, and without admitting or denying the 

findings herein, except as to the Commission’s jurisdiction over it and the subject matter of these 

proceedings, which are admitted, Respondent consents to the entry of this Order Instituting 

Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, 

Making Findings, and Imposing a Cease-and-Desist Order (“Order”), as set forth below. 



 

 2 

III. 
 

 On the basis of this Order and Respondent’s Offer, the Commission finds
1
 that:  

  

Summary 

 1. This matter concerns violations of the Foreign Corrupt Practices Act (the 

“FCPA”) [15 U.S.C. 78dd] by Quad/Graphics, Inc., a marketing solutions and printing services 

provider headquartered in Sussex, Wisconsin.  From at least 2011 to January 2016, Quad 

engaged in multiple bribery schemes to secure business by paying or promising over a million 

dollars in bribes through subsidiaries in Peru and China.  In one bribery scheme, Quad/Graphics 

Peru S.A. (“Quad Peru”), paid or promised bribes to government officials in Peru to win sales 

contracts from the Peruvian National Institute of Statistics and Information (“INEI”) and other 

government municipalities, and to avoid penalties on existing contracts with the Ministry of 

Education (“MINEDU”).  Quad Peru also participated in a judicial bribery scheme when it tried 

to influence the outcome of a tax dispute with the Superintendencia Nacional de Aduanas y de 

Administraciόn Tributaria (“SUNAT”), the Peruvian tax authority, which had imposed over 

$12,000,000 in Value-Added Tax (“VAT”), interest, penalties and fines.  In 2012 and 2013, 

Quad Peru paid over $200,000 in bribes through a local counsel to judges involved in the 

litigation.  In another scheme, from 2010 to 2015, Quad’s subsidiary, Quad/Tech Shanghai 

Trading Company (“Quad/Tech China”), paid or promised approximately $182,000 in improper 

payments to employees of private and government customers through sham sales agents to 

secure business.  Quad employees utilized various means and instrumentalities of U.S. interstate 

commerce to facilitate the bribery schemes in Peru.  

 2. In addition to bribery, Quad Peru also violated U.S. sanctions and export control 

laws by engaging in commercial transactions with a state controlled Cuban telecommunications 

company, Empresa de Telecomunicaciones de Cuba S.A. (“ETECSA”), and violated the FCPA’s              

books and records provisions by creating false records to conceal the transactions.  Generally, 

these sanctions and export control laws prohibit business transactions with sanctioned countries 

that involve U.S. persons, companies or goods.  None of Quad’s improper payments in Peru or 

China were accurately reflected in its books and records and Quad failed to have sufficient 

internal accounting controls in place to detect or prevent the various misconduct.  Quad was 

unjustly enriched by approximately $7 million as a result of these schemes. 

      Respondent 

 3. Quad/Graphics, Inc. is a publicly traded marketing solutions and printing services 

provider headquartered in Sussex, Wisconsin, with operations in 10 countries.  Since 2010, 

Quad’s common stock has been registered in the United States pursuant to Section 12(b) of the 

Exchange Act.  It trades on the NYSE under the ticker “QUAD” and files periodic reports, 

                                                 
1
  The findings herein are made pursuant to Respondent's Offer of Settlement and are not  

binding on any other person or entity in this or any other proceeding.   

 



 

 3 

including Forms 10-K, with the Securities and Exchange Commission as required under Section 

13(a) of the Exchange Act.   

Relevant Entities 

 4. Quad/Graphics Peru S.A. (“Quad Peru”), formerly known as World Color Peru, is 

a wholly owned subsidiary of Quad.  The Lima, Peru, plant specializes in printing and 

assembling packets for educational textbooks and exams.  It also prints directories, magazines, 

catalogs and retail inserts.  It also prints and publishes board books and telephone directories.  

During the relevant period, Quad Peru’s books and records were consolidated into the financial 

statements of Quad.   

 5. Quad/Tech Shanghai Trading Company, Ltd. (“Quad/Tech China”) was a wholly-

owned subsidiary of Quad/Graphics, Inc.  Quad/Tech China sold automated systems for 

commercial, newspaper, packaging and publication printers.  During the relevant period,      

Quad /Tech China’s books and records were consolidated into the financial statements of Quad.  

                                                                    FACTS 

                                                              BACKGROUND 

 6. Prior to 2010, Quad was a privately held printing company headquartered in 

Sussex, Wisconsin, with a focus on domestic sales.  With the July 2010 acquisition of World 

Color Press, Inc. (“World Color”), a Canadian printing company, Quad quickly became a public 

company with a major international presence.  Quad acquired over 16,000 World Color 

employees, several subsidiaries, and multiple plants throughout Latin America, and its common 

shares began trading on the NYSE.  Despite becoming a publicly traded company with a large 

global workforce and operations in high risk areas, Quad’s compliance program was almost non-

existent in 2010.  At the time, Quad failed to implement sufficient internal accounting controls or 

anti-corruption policies and procedures and failed to conduct meaningful due diligence on third 

parties.  Likewise, internal audit had no visible role in anti-corruption testing and the company 

failed to conduct broad FCPA or ethics training until approximately 2012.  It appointed its first 

Director of Compliance, an individual with no compliance experience or training and an 

information technology background, in 2011.   

 7. From at least 2011 to 2016, Quad’s failure to implement a robust compliance 

program and maintain sufficient internal accounting controls contributed to ongoing bribery 

schemes in Peru to obtain business and win favorable outcomes in tax litigation.  The schemes 

were facilitated through third party vendors.  Quad’s then Operations Executive for Latin 

America and a then Finance Executive for Latin America, both based in the U.S., either ignored 

significant red flags or participated in the misconduct.  These failures also allowed Quad/Tech 

China’s bribery of customers to facilitate systems sales to continue from 2010 to 2015, and Quad 

Peru’s sanctions violations in connection with the sale of goods to Cuba in 2012.  None of the 

improper payments were accurately reflected in Quad’s books and records and its internal 

accounting controls were not reasonably designed to detect or prevent them.   



 

 4 

Bribery to Secure Sales in Peru 

 8.  In 2011, Quad Peru’s former Head Sales Executive was approached by an 

individual with influence in the Peruvian government who requested that Quad Peru pay him a 

“commission” in exchange for a government contract with INEI, one of Quad Peru’s largest 

customers.  Quad Peru’s Head Sales Executive obtained verbal approval to pay the bribe from 

Quad Peru’s former General Manager.  Thereafter, from 2011 to 2016, Head Sales Executive 

continued to make payments with the expectation that bribes would be paid to government 

officials to secure contracts, primarily with INEI, and also to other officials at government 

municipalities in Peru.  The improper payments were made through four purported third party 

vendors, which were sham companies owned by the same individual (“Sham Vendors”).   

 9. The four Sham Vendors were all registered in Lima, Peru, three with the same 

address, and had no real business operations.  The Sham Vendors were used to pay bribes to both 

government officials and private customers on behalf of Quad Peru.  Quad failed to conduct any 

due diligence on the Sham Vendors.   

 10.  Most of the invoices submitted by the Sham Vendors were purportedly for pre-

press, modulation and/or packaging services provided to Quad Peru in connection with INEI 

contracts.  In truth, none of the Sham Vendors performed any such services for Quad Peru.  

Instead, pre-press, modulation and packaging services were performed on site by Quad Peru 

employees or by unrelated external third parties.      

 11. The bribes that Quad Peru paid to INEI officials were approximately 13% of each 

government contract work order and were paid through fake invoices for services submitted by 

the Sham Vendors that were routinely approved by the Quad Peru Head Sales Executive and the 

Quad Peru General Manager.  

 12. Quad Peru’s then Senior Finance Manager was aware of the improper 

commission payments.  He ensured that the related invoices from the Sham Vendors were paid 

after the Head Sales Executive and General Manager approved them.  As the volume of improper 

payments increased, the Senior Finance Manager became increasingly concerned about 

authorizing them.  He expressed his concerns to the General Manager but was brushed aside.   

 13. In approximately 2013, the Senior Finance Manager, with another Manager 

present, contacted a Finance Executive for Latin America who was based in the United States to 

discuss the improper conduct.  The Finance Executive advised the Peru Senior Finance Manager 

not to forward any invoices directly to him and stated he would look into the matter.  Despite this 

reassurance, the Senior Finance Manager never heard back from the Finance Executive on the 

subject and no follow up occurred.  The improper commissions continued to be paid by wire 

transfers to accounts held by the Sham Vendors at various Peruvian banks or by checks that were 

hand delivered to the Sham Vendor’s principal or the Sham Vendor’s accountant in Peru.  



 

 5 

 14. In addition to using the Sham Vendors to pay bribes to government officials to 

secure contracts, Quad Peru also used them to pay bribes to employees of private customers from 

at least 2013 to 2015 to secure business.  

 15. In December 2014, the Finance Executive received additional notice of costs 

related to two of the Sham Vendors, when the Senior Finance Manager for Quad Peru emailed a 

copy of Quad Peru’s standard monthly presentation for November 2014, to Quad in the U.S. for 

review as Quad was closely monitoring costs at Quad Peru.  The presentation contained a 

detailed analysis of Quad Peru’s November operating results and identified large vendor costs 

for the two Sham Vendors.  In fact, Quad Peru’s second and third largest costs that period were 

due to fake invoices submitted by these vendors.  Despite the Finance Executive’s previous 

conversation with the Senior Finance Manager, the Finance Executive failed to inquire about the 

vendor costs and Quad Peru continued to pay additional bribes through phony invoices submitted 

by the Sham Vendors.    

 16. Quad Peru’s Senior Finance Manager eventually left the company in 2015.  In late 

2015, a new Senior Finance Manager was hired from outside Quad.  Once the new Senior 

Finance Manager was in place, two concerned managers in Peru approached him about several 

suspicious invoices that had recently been submitted by two of the Sham Vendors.  Several of 

the invoices contained red flags, including having the same date and dollar amounts, and 

consecutive invoice numbers.  Upon review, the new Senior Finance Manager agreed the 

invoices were problematic and declined to approve them.  In January 2016, the Quad Peru Senior 

Finance Manager reported the matter to the Finance Executive, the same individual who, years 

earlier, was notified of similar suspicious payments by Quad Peru’s former Senior Finance 

Manager.  After hearing from the new Senior Finance Manager, the Finance Executive reported 

the suspicious payments to his supervisor and then to Quad’s U.S. Legal Department. 

 17. In all, from at least 2011 to January 2016, Quad Peru paid or promised over $1 

million in bribes through the Sham Vendors to secure contracts by which Quad was unjustly 

enriched by over $4.4 million. 

 18. From 2011 through 2015, the Head Sales Executive and the General Manager of 

Quad Peru also used the Sham Vendors to pay over $117,000 in bribes to government officials at 

MINEDU to reduce penalties and extend the delivery dates on certain existing contracts in order 

to avoid defaulting on contracts with MINEDU.  From June 2011 to May 2013, Quad Peru paid 

over $45,000 in additional bribes to MINEDU officials in order to avoid penalties for failure to 

meet the terms of existing contracts with MINEDU.  These payments were made through a slush 

fund that was created with the assistance of seven other third party vendors.  As a result of this 

misconduct, Quad was unjustly enriched by over $970,000. 

 19. The bribe payments were falsely recorded in Quad’s books and records, primarily 

as pre-press or related services.  Quad lacked a system of internal accounting controls sufficient 

to detect or prevent the payments despite the presence of numerous red flags, including vendor 

invoices with rounded dollar amounts, large invoice amounts that were disproportionate to the 



 

 6 

services described, invoices that were consecutively numbered (sometimes with the same date) 

and invoices without purchase orders or other supporting documentation. 

 20. In addition, though Quad began providing some FCPA and anti-corruption 

training in Latin America in approximately 2012, it was not taken seriously by certain Quad 

Latin America employees.  High level Latin America executives failed to support the effort, as 

illustrated by one management meeting in Peru where sales performance issues were discussed, 

and the Operations Executive for Latin America alluded to bribery when he joked that everything 

about Quad Peru’s operations could be changed except the Head Sales Executive, because he 

was the key to contracts with MINEDU, presumably due to his corrupt efforts to win those sales.      

Judicial Bribery Scheme in Peru 

 21. During 2012 and 2013, Quad Peru also engaged in a judicial bribery scheme in 

Peru.  Starting in approximately 2000, SUNAT, the Peruvian tax authority, assessed what 

ultimately totaled over $12,000,000 in VAT, interest, penalties and fines against Quad Peru for 

failure to pay VAT on certain book sales to MINEDU.  Quad Peru (formerly World Color Peru) 

filed a complaint against SUNAT to challenge the tax assessment, and engaged in litigation that 

lasted for years.  As the amount in dispute grew over time, the potential loss of over $12,000,000 

for unpaid VAT was a concern for Quad.  It was essentially the equivalent of approximately two 

years of profit for Quad Peru. 

 22.  In April 2010, Quad Peru retained a local Peruvian law firm to serve as outside 

counsel on the SUNAT litigation.  Quad Peru paid the law firm a monthly fee of approximately 

$1,000 to $1,200 for routine services related to the litigation.   

 23. Sometime around 2011, after setbacks in the litigation and at the law firm’s 

suggestion, Quad Peru’s management agreed to use the law firm to facilitate the payment of 

bribes to Peruvian judges to try to influence their decisions on the SUNAT litigation.  Quad 

Peru’s management obtained approval from the Operations Executive, based in the United 

States, to engage in the judicial bribery scheme.   

 24. The first bribe occurred in approximately 2011, when Quad Peru’s Senior Finance 

Manager arranged for payment of $20,000 to the law firm for purposes of bribing a judge.  The 

Senior Finance Manager obtained the $20,000 by having approximately two or three third party 

vendors, which had previously provided legitimate services, submit fake invoices.  Quad Peru 

paid the invoices and once the vendors received payment they returned some portion of the 

money to Quad Peru’s former Head Sales Executive and the Senior Finance Manager.  The 

Senior Finance Manager then used the money to pay the law firm.  The third party vendors took 

part in the scheme so that Quad Peru would continue to hire them to perform other legitimate 

services.  The Senior Finance Manager personally delivered the $20,000 in cash to the law firm’s 

office in Lima, Peru, for onward payment to a judge.    

 25. Around the time that the bribe was paid, Quad had a significant victory in the 

SUNAT litigation.  In October 2011, the Litigation Court in Lima ruled in Quad Peru’s favor on 



 

 7 

the VAT issue.  The Court ruled that Quad Peru’s dispute of SUNAT’s tax assessment was 

founded.  However, SUNAT appealed the ruling and also challenged a previous injunction 

barring it from seizing Quad Peru’s assets while the lawsuit was pending. 

 26. In March 2012, the court cleared the way for SUNAT to seize Quad Peru’s assets, 

including its cash and accounts receivables.  Quad Peru’s operational infrastructure and 

materials, including its operating plant and other real property, also became subject to seizure.  

 27. On July 24, 2012, Quad Peru signed a “success fee” contract with the law firm 

agreeing to pay the law firm a maximum of $208,000 if the law firm successfully defended Quad 

Peru in the ongoing SUNAT dispute.   

 28. From September 2012 to late December 2012, SUNAT seized approximately 

$4.49 million from Quad Peru’s bank accounts.  In addition, SUNAT seized approximately $7 

million in cash receivables.             

 29. On or about December 11, 2012, with approval from the Operations Executive in 

the U.S., Quad Peru agreed to pay the law firm an “extraordinary” fee so that the law firm could 

use the funds to bribe a judge and stop the seizure of Quad Peru’s bank accounts and assets.  The 

bribe initially seemed successful, as two days later, on December 13, 2012, the Administrative 

court granted Quad Peru’s request for a preliminary injunction contingent on the provision of a 

bank guarantee by Quad Peru of the full amount owed.  SUNAT appealed and the litigation 

continued. 

 30. On December 14, 2012, the law firm issued an invoice to Quad Peru for $50,504 

describing its services as “advice during the coercive execution process and in obtaining a 

precautionary measure.”  Quad Peru’s Senior Finance Manager signed off on the invoice and 

paid it the same day. 

 31. Quad’s documents and internal emails also referred to the bribe payments as  

“extraordinary fees.”  This fee and later fees called “extraordinary” were in addition to the 

normal monthly payments made to the law firm.   

 32. In April 2013, the law firm issued an invoice for $407,100 to fund additional 

bribes to judges.  Unwilling to take sole responsibility for the very large payment to the law firm, 

the Senior Finance Manager of Quad Peru forwarded the invoice by email to the Finance 

Executive, who was based in the U.S., for payment approval.  The Finance Executive then 

forwarded the invoice to the Operations Executive who was also in the U.S. and who also had 

knowledge of the bribery scheme.  After discussing the $407,100 invoice with the Operations 

Executive, the Finance Executive told the Senior Finance Manager to pay the invoice, despite the 

possibility the money would be used for bribery.   

 33. Days later, Quad Peru wired a portion of the invoice amount, $230,000, to the law 

firm.  Payment was wired from Quad Peru’s Miami, Florida bank account, an account typically 

used to pay for supplies, not attorney’s fees.  Quad’s Finance Executive told the Senior Finance 



 

 8 

Manager how to account for the payment in Quad Peru’s books and records due to his concern 

about it appearing in variance reports. 

 34. On or about June 7, 2013, the law firm refunded $173,181, roughly two thirds of 

the original $230,000 payment, to Quad Peru, keeping approximately $56,819.  The law firm 

refunded the money because its attempt to bribe the appellate judges in charge of SUNAT’s 

appeal was unsuccessful.  This became evident days later on or about June 10, 2013, when 2 of 

the 3 appellate judges considering Quad Peru’s appeal voted in favor of SUNAT.     

 35. Between 2012 and 2013, SUNAT seized approximately $11.89 million.  In 

October 2013, Quad Peru made another payment of approximately $108,488 to the law firm.  

According to the invoice submitted by the law firm, the payment was a “contentious 

administrative procedure success fee related to SUNAT.”  The payment did not relate to any 

“success” on the part of the law firm.  Instead it related, at least in part, to the law firm’s 

assistance with the judicial bribery scheme.  In all, Quad Peru made improper payments of 

approximately $209,752 to the law firm in connection with the failed judicial bribery scheme.   

 36. Ultimately, in the summer of 2014, SUNAT won its appeal of the lower court 

ruling in favor of Quad Peru.  On or about November 3, 2014, Quad Peru filed an appeal of the 

decision with the Peruvian Supreme Court.  The litigation finally concluded on or about March 

20, 2018, when the Peruvian Supreme Court decided the case in favor of Quad Peru.  

Quad Conceals its Sales Transactions in Cuba  

 37. Before World Color, a Canadian company, was acquired by Quad in 2010, it 

regularly conducted business with Cuba.  One of its largest clients was ETECSA, a state owned 

telecommunications company that purchased telephone directories from World Color Peru.   

Despite existing U.S. sanctions and export control laws, sales to Cuba continued after World 

Color’s acquisition by Quad.  

 

38. Certain Quad employees, including members of management in Peru and the 

former Operations Executive based in the U.S., concealed transactions with Cuba in internal emails 

and correspondence discussing the contract negotiations, financing arrangements, shipping and 

printing.  Additional books and records were falsified to conceal the transactions, including 

references to “broker” that were intended to conceal the efforts to use a third party as a pass 

through company.   As a result of the conduct, Quad’s contracts, shipping documents, invoices, 

and journal entries were inaccurate.   

 

39. In October 2010, Quad Peru signed a contract with ETECSA to print and sell 

Cuban telephone directories for approximately $1.2 million.  Quad Peru arranged the sale even 

though it was prohibited by U.S. sanctions and export control laws.  In early 2011, Quad Peru 

shipped the telephone directories to ETECSA.  

 

40. Knowing that sales to ETECSA were barred by U.S. sanctions, the Operations 

Executive and Quad Peru’s General Manager and Senior Finance Manager sought to conceal the 



 

 9 

2010 Cuba sale from other executives in the U.S.  In an email dated March 8, 2011, the Operations 

Executive cautioned Quad Peru’s Senior Finance Manager, its General Manager and several other 

Quad Peru employees that “[t]he USA legal department requested that we do not mention the word 

CUBA in our reports. This is a legal matter in the USA and at times our reports get to them.”  The 

Operations Executive recommended using the initials of the customer, ETECSA, in reports instead.     

 

41. Around the same time, in early March 2011, the Operations Executive sent e-mails 

to the Senior Finance Manager asking whether Quad Peru had sent invoices to ETECSA in 2011, 

and also whether there was a plan to use a broker in the future.  The Senior Finance Manager 

responded that invoices for approximately $1.1 million had already been sent to ETECSA in 2011, 

and that they would use a Peruvian Agent as a broker going forward.   

 42. By this time, members of management in Quad Peru and Latin America had 

developed a scheme through which Quad Peru attempted to conceal its sale to ETECSA by 

making it appear on its books and records that it had sales to a Peruvian Agent.  In fact, the 

Peruvian Agent was not a true customer but a pass through company used to conceal Quad’s 

sales of telephone directories to Cuba.  

 43. On or about April 11, 2011, Quad’s Legal Department emailed the Operations 

Executive explaining that U.S. law prohibited trade between U.S. companies and Cuba.  The 

Legal Department added that as a result of the acquisition of World Color, Latin American 

subsidiaries could no longer sell products or provide services to customers in Cuba.  Lastly, the 

Legal Department asked the Operations Executive to confirm that Quad Peru was no longer 

selling or providing products or services to ETECSA.   

 44. Despite knowing from prior communications with Quad Peru’s Senior Finance 

Manager that Peru planned to continue unlawful sales to Cuba using the Peruvian Agent as a 

broker, the Operations Executive purposely misled the Legal Department, writing: “I verified 

this last month.  I confirm Peru is no longer producing any work for Cuba….They were also 

instructed not to accept any work from [C]uban customers.”   

 45. On February 24, 2012, Quad Peru signed a purported sales contract with the 

Peruvian Agent, to print telephone directories for ETECSA in Cuba for the period 2012-2013, 

when in fact it was a sale between Quad Peru and ETECSA, with Quad Peru providing the 

telephone directories.  The Peruvian Agent was described as an intermediary for the sale and also 

provided pre-press services.  The Peruvian Agent submitted sham invoices to Quad Peru and 

received payment in 2012 and 2013.   

 46. On March 12, 2012, the Peruvian Agent signed a contract with ETECSA to 

publish the telephone directories.  The Peruvian Agent then hired Quad Peru as a subcontractor.  

Quad Peru printed, packaged, and arranged for shipment of the directories to Cuba.  Thus, the 

Peruvian Agent was simply a pass through to avoid the Legal Department’s advice on U.S. 

sanctions.     



 

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 47. From approximately February 18 to 29, 2012, Quad Peru also paid hotel bills for 

ETECSA employees who visited Peru to review sample telephone directories and oversee the 

start of the 2012 printing and packaging project.  Additionally, from approximately April 8, 

2010, to July 1, 2012, Quad Peru sales representatives also traveled to Cuba multiple times to 

meet with ETECSA officials to discuss the pending printing project for ETECSA.   

 48. Months later in approximately September 2012, during a risk assessment in Peru 

conducted by the company’s compliance group and its external accounting consultants, 

executives in the U.S. learned about the improper 2012 sale to Cuba.  Despite learning of the 

sale, executives in the U.S failed to put adequate internal accounting controls and trade 

compliance measures in place to ensure that no additional work was conducted with ETECSA or 

other sanctioned countries.  To the contrary, the illegal sale in 2012 was completed with the 

knowledge and approval of Quad’s Operations Executive. 

 49. In August 2013, despite knowing by this time that sales to Cuba were prohibited, 

Quad Peru employees opted to bid on yet another contract with ETECSA for the sale of 2014 

telephone directories.  Quad Peru won the bid in September 2013, but subsequently withdrew it 

in October 2013, because of U.S. sanctions. 

 50. The revenue from the 2012 sale to ETECSA was falsely recorded in Quad Peru’s 

books and records as a sale to Peruvian Agent.  Quad’s illicit gain on the sale to ETECSA was 

approximately $200,000. 

 Bribery to Secure Sales in China 

 51. In addition to the improper conduct in Peru, from 2010 to 2015, bribes were 

promised and paid by Quad’s China based subsidiary, Quad/Tech China, to employees of state 

owned entities and private customers through sham sales agents to win business.   

 52. During the relevant period, Quad/Tech China sold and serviced systems that 

attached to printing machinery.  The systems were designed to improve the quality and 

efficiency of printing presses utilized by customers.  Most of Quad/Tech China’s customers were 

Original Equipment Manufacturers (“OEMs”) and press end users.  Quad/Tech China’s clients 

were in traditional (e.g. newspapers) and packaging printing and its focus was on the packaging 

side of the market.      

 53. Since there were only a handful of OEMs selling printing presses in China and an 

equally small number of press end users, Quad/Tech China’s potential customer base was small.  

Sotech Machinery Co. Ltd. (“Sotech”), an OEM specializing in packaging printing equipment, 

mostly for the cigarette industry, was one of Quad/Tech China’s largest customers.  Another 

large OEM and customer was Shaanxi Beiren (“Shaanxi Beiren”) Printing Machinery Co. Ltd., a 

state owned entity and manufacturer of printing, decorating and packaging machinery.       

 54. From at least 2010 to July 2015, Quad/Tech China promised or paid commissions 

to sales agents who then passed some portion of the payments on to employees of OEMs and end 

users at private and public companies in China.  The payments were made to induce customers to 



 

 11 

purchase Quad/Tech China’s systems.  Illicit payments were made to Chinese officials at 

Shaanxi Beiren and to employees of Sotech to win sales. 

 55. The fake commissions that Quad/Tech China paid to sales agents to make illicit 

payments were generally 2% of sales order values and were typically described on invoices as 

“technical service fees.”  The identities of the sham sales agents were kept secret from most 

Quad/Tech China employees.  They did not provide any bona fide services and were not 

involved in any business operations at Quad/Tech China.  They simply invoiced Quad/Tech 

China for a 2% commission and then transferred payment to customer employees in return for 

Quad/Tech obtaining a contract. 

 56. The improper payments were largely facilitated by a former Quad/Tech China 

Sales Executive in charge of the package printing business in China.  Quad/Tech China’s then 

General Manager and its then Finance Manager were also aware of the payments to the sham 

sales agents.  All three employees were based in China.   

 57. The total amount of improper commissions that Quad/Tech China paid or 

promised to sales agents in China was approximately $182,000.     

 58. Quad/Tech China did not do any due diligence on the sham sales agents and no 

proof of services performed were provided before their invoices were paid.    Quad failed to 

provide adequate oversight and auditing of Quad/Tech China.  In addition, Quad/Tech China 

employees were inadequately trained on the company’s anti-corruption policies.  The improper 

payments were falsely recorded in Quad’s books and records as “commissions” and Quad failed 

to devise and maintain a system of internal accounting controls sufficient to detect or prevent the 

improper payments.  Quad/Tech China was unjustly enriched by approximately $1,087,322 as a 

result of the improper payments in China.  

Legal Standards and Violations 

 59. Under Section 21C of the Exchange Act, the Commission may impose a cease-

and desist order upon any person who is violating, has violated, or is about to violate any 

provision of the Exchange Act or any rule or regulation thereunder, and upon any other person 

that is, was, or would be a cause of the violation, due to an act or omission the person knew or 

should have known would contribute to such violation.  

 60. As a result of conduct described above in Peru, Quad violated Section 30A of the 

Exchange Act, which in relevant part makes it unlawful for an issuer with securities registered 

under Section 12 of the Exchange Act or which is required to file reports under Section 15(d) of 

the Exchange Act, or any employee or agent acting on its behalf, to make use of the mails or any 

means or instrumentality of interstate commerce corruptly in furtherance of an effort to pay or 

offer to pay anything of value to foreign officials for the purpose of influencing their official 

decision-making, in order to assist in obtaining or retaining business.  Each Quad subsidiary 

described above was an “agent” of Quad within the meaning of the Foreign Corrupt Practices 

Act.   



 

 12 

 61. As a result of the conduct described above, Quad violated Section 13(b)(2)(A) of 

the Exchange Act, which requires 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.   

 62. As a result of the conduct described above, Quad violated Section 13(b)(2)(B) of 

the Exchange Act, which requires issuers to devise and maintain a system of internal accounting 

controls sufficient to provide reasonable assurances that (i) transactions are executed in 

accordance with management’s general or specific authorization; (ii) transactions are recorded as 

necessary (I) to permit preparation of financial statements in conformity with generally accepted 

accounting principles or any other criteria applicable to such statements, and (II) to maintain 

accountability for assets; (iii) access to assets is permitted only in accordance with 

management’s general or specific authorization; and (iv) the recorded accountability for assets is 

compared with the existing assets at reasonable intervals and appropriate action is taken with 

respect to any differences.   

Quad’s Self-Disclosure, Cooperation, and Remedial Efforts 

 63. In determining to accept the Offer, the Commission considered Respondent’s self-

disclosure, cooperation and remedial efforts.  Quad voluntarily disclosed the misconduct.  The 

company’s cooperation included sharing facts developed during the course of its own internal 

investigation, producing documents and other materials (including documents from overseas), 

translating key documents, summarizing findings of internal investigations, providing summaries 

of witness interviews, and assisting in making current and former employees available for 

interviews. 

 64. Quad’s remedial actions included: (i) terminating employees involved in the 

improper conduct; (ii) enhancing the role and resources within the compliance department; (iii) 

hiring a new International Trade Compliance Manager; (iv) ongoing recruitment for, and training 

of, new compliance and internal audit personnel with anti-corruption expertise; (v) completing a 

root-cause analysis and implementing several internal controls enhancements; (vi) updating its 

code of conduct to further address FCPA issues; and (vii) updating policies and procedures 

designed to ensure appropriate risk assessments and integration plans are developed for newly 

acquired entities. 

Undertakings 

65. Respondent undertakes to:  

Report to the Commission staff periodically during a one-year term, the status of its 

remediation and implementation of compliance measures, particularly as to anti-corruption risk 

assessments and integration of acquired entities, staffing and budgeting for compliance and 

internal audit, and due diligence and monitoring of payments to third-parties. During this period, 

should Respondent discover credible evidence, not already reported to Commission staff, that 

questionable or corrupt payments or questionable or corrupt transfers of value may have been 

offered, promised, paid, or authorized by Respondent, or any entity or person acting on behalf of 



 

 13 

Respondent, or that related false books and records have been maintained, Respondent shall 

promptly report such conduct to the Commission staff. During this one-year period, Respondent 

shall: (1) conduct an initial review and submit an initial report and (2) conduct and prepare one 

follow-up review and report, as described below:  

 

a. Respondent shall submit to the Commission staff a written report within 180 

calendar days of the entry of this Order setting forth a complete description of its 

FCPA and anti-corruption related remediation efforts to date for ensuring 

compliance with the FCPA and other applicable anti-corruption laws, and the 

parameters of the subsequent review (the “Initial Report”). The Initial Report 

shall be transmitted to Tracy Price, Deputy Chief, FCPA Unit, United States 

Securities and Exchange Commission, 100 F Street, NE, Washington, DC, 20549-

5631. Respondent may extend the time period for issuance of the Initial Report 

with prior written approval of the Commission staff. 

b. Respondent shall undertake one follow-up review, incorporating any comments 

provided by the Commission staff on the previous report, to further monitor and 

assess whether the policies and procedures and remediation efforts of Respondent 

are reasonably designed and implemented to detect and prevent violations of the 

FCPA and other applicable anti-corruption laws (the “Follow-Up Report”).  

c. The Follow-up Report shall be completed by no later than 180 days after the 

Initial Report.  Respondent may extend the time period for issuance of the 

Follow-up Report with prior written approval of the Commission staff.  

d. The periodic reviews and reports submitted by Respondent will likely include 

proprietary, financial, confidential, and competitive business information. Public 

disclosure of the reports could discourage cooperation, impede pending or 

potential government investigations and thus undermine the objectives of the 

reporting requirement. For these reasons, among others, the reports and the 

contents thereof are intended to remain and shall remain nonpublic, except (a) 

pursuant to court order, (b) as agreed by the parties in writing, (c) to the extent 

that the Commission staff determines in its sole discretion that disclosure would 

be in furtherance of the Commission’s discharge of its duties and responsibilities, 

or (d) is otherwise required by law.  

e. During this one-year period of review, Respondent shall provide its external 

auditors with its annual internal audit plan and reports of the results of internal 

audit procedures and its assessment of its FCPA compliance policies and 

procedures. 

f. During the one-year period of review, Respondent shall provide Commission staff 

with any written reports or recommendations provided by Respondent’s external 

auditors in response to Respondent’s annual internal audit plan, reports of the 



 

 14 

results of internal audit procedures, and its assessment of its FCPA compliance 

policies and procedures. 

g. Certify, in writing, compliance with the undertaking(s) set forth above.  The 

certification shall identify the undertaking(s), provide written evidence of 

compliance in the form of a narrative, and be supported by exhibits sufficient to 

demonstrate compliance.  The Commission staff may make reasonable requests for 

further evidence of compliance, and Respondent agrees to provide such evidence.  

The certification and supporting material shall be submitted to Tracy L. Price, 

Deputy Chief, FCPA Unit, with a copy to the Office of Chief Counsel of the 

Enforcement Division, no later than sixty (60) days from the date of the completion 

of the undertakings. 

IV. 

 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 

agreed to in Respondent Quad’s Offer.  Accordingly, it is hereby ORDERED that:  

A. Pursuant to Section 21C of the Exchange Act, Respondent Quad cease-and-desist 

from committing or causing any violations and any future violations of Sections 30A, 

13(b)(2)(A) and 13(b)(2)(B)  of the Exchange Act [15 U.S.C. §§ 78m(b)(2)(A), 78m(b)(2)(B), 

and 78dd-1].  

  

B. Respondent shall comply with its Undertakings as enumerated in paragraph 65 

above.   

  

C. Respondent shall, within fourteen days of the entry of this Order, pay 

disgorgement of $6,936,174, prejudgment interest of $959,160, and a civil penalty of 

$2,000,000, for total payment of $9,895,334 to the Securities and Exchange Commission for 

transfer to the general fund of the United States Treasury, subject to Exchange Act Section 

21F(g)(3).  If timely payment of disgorgement and prejudgment interest is not made, additional 

interest shall accrue pursuant to SEC Rule of Practice 600.  If timely payment of the civil penalty 

is not made, additional interest shall accrue pursuant to 31 U.S.C. §3717.   

 

Payment must be made in one of the following ways:     

  

(1) Respondent may transmit payment electronically to the Commission, 

which will provide detailed ACH transfer/Fedwire instructions upon request;  

  

(2) Respondent may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or   

  



 

 15 

(3) Respondent may pay by certified check, bank cashier’s check, or United 

States postal money order, made payable to the Securities and Exchange 

Commission and hand-delivered or mailed to:   

 

Enterprise Services Center  

Accounts Receivable Branch  

HQ Bldg., Room 181, AMZ-341  

6500 South MacArthur Boulevard  

Oklahoma City, OK 73169  

  

  Payments by check or money order must be accompanied by a cover letter identifying 

Quad as a Respondent in these proceedings, and the file number of these proceedings; a copy of 

the cover letter and check or money order must be sent to Tracy L. Price, Deputy Chief, FCPA 

Unit, Division of Enforcement, Securities and Exchange Commission, 100 F St., NE, 

Washington, DC 20549-5631.  

 

D. Amounts ordered to be paid as civil money penalties pursuant to this Order shall 

be treated as penalties paid to the government for all purposes, including all tax purposes.  To 

preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 

Action, it shall not argue that[it is entitled to, nor shall it benefit by, offset or reduction of any 

award of compensatory damages by the amount of any part of Respondent’s payment of a civil 

penalty in this action ("Penalty Offset").  If the court in any Related Investor Action grants such 

a Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order 

granting the Penalty Offset, notify the Commission's counsel in this action and pay the amount of 

the Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be 

deemed an additional civil penalty and shall not be deemed to change the amount of the civil 

penalty imposed in this proceeding.  For purposes of this paragraph, a "Related Investor Action" 

means a private damages action brought against Respondent by or on behalf of one or more 

investors based on substantially the same facts as alleged in the Order instituted by the 

Commission in this proceeding. 

  



 

 16 

 

E. Respondent acknowledges that the Commission is not imposing a civil penalty in 

excess of $2,000,000 based upon its cooperation in a Commission investigation and related 

enforcement action.  If at any time following the entry of the Order, the Division of Enforcement 

(“Division”) obtains information indicating that Respondent knowingly provided materially false 

or misleading information or materials to the Commission, or in a related proceeding, the 

Division may, at its sole discretion and with prior notice to the Respondent, petition the 

Commission to reopen this matter and seek an order directing that the Respondent pay an 

additional civil penalty.  Respondent may contest by way of defense in any resulting 

administrative proceeding whether it knowingly provided materially false or misleading 

information, but may not:  (1) contest the findings in the Order; or (2) assert any defense to 

liability or remedy, including, but not limited to, any statute of limitations defense. 

  

  By the Commission.  

  

  

  

Vanessa A. Countryman 

Secretary