In re KARL J. ZIMMER

 
 
UNITED STATES OF AMERICA 
Before the 
SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 79704 / December 29, 2016 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-17756 
 
 
In the Matter of 
 
KARL J. ZIMMER, 
 
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 Karl J. Zimmer (“Zimmer” 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 him and the subject matter of these 
proceedings, which are admitted, and except as provided herein in Section V, 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. In November and December 2013, Zimmer, who was a Senior Vice President of 
General Cable Corporation (“GCC”), approved improper commission payments to a third-party 
agent (“Agent”) on sales by GCC’s Angolan subsidiary to Angolan state-owned enterprises 
(“SOEs”).  At the time, Zimmer knew that GCC’s policies prohibited excessive commissions to 
third parties on sales to SOEs, GCC had commenced an investigation of potentially improper 
payments to the Agent, and GCC had prohibited the payment of past due commissions to the 
Agent while the investigation was pending and without further approval.  Zimmer, however, 
approved multiple commissions to the Agent totaling $342,613, including commissions nearly 
double GCC’s prescribed limits on third-party commissions, and which were not documented by 
any services performed by the Agent.  By approving these commissions, Zimmer caused GCC’s 
violations of the books and records and internal accounting controls provisions of the Foreign 
Corrupt Practices Act of 1977 (“FCPA”), and knowingly circumvented a number of GCC’s 
internal accounting controls. 
Respondent 
2. Zimmer, age 40, is a resident of Douglas, Georgia.  Zimmer joined GCC in June 
2001 and was promoted, effective January 2014, to Senior Vice President of GCC’s Europe and 
Africa Supply Chain and Global Supply Chain, responsible for sales and marketing in those 
regions.  Zimmer’s employment with GCC ended in January 2015. 
Relevant Entities 
3. General Cable Corporation (“GCC”) is a publicly traded company headquartered 
in Highland Heights, Kentucky.  GCC is a global manufacturer of copper, aluminum, and fiber 
optic wire and cable products.  During the relevant period, GCC maintained operations in Angola 
within its Europe & Mediterranean segment (“E&M,” now known as the Europe segment).  GCC’s 
common stock is registered with the Commission under Section 12(b) of the Exchange Act, and 
GCC files annual and quarterly reports under Section 13(a) of the Exchange Act and related rules.  
GCC’s common stock trades on The New York Stock Exchange under the ticker symbol “BGC.” 
4. General Cable Condel, Cabos de Energia e Telecomunicações, S.A. (“Condel”) 
is an indirect GCC subsidiary located in Angola and manufactured and sold wire and cable 
products primarily to entities owned by the Angolan government. 
                                                 
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 
GCC’s Policies on Unlawful or Unethical Payments 
5. At all relevant times, GCC had a Code of Ethics and Compliance Guidelines 
(“Code of Ethics”) that prohibited its employees from offering or giving any person any payment 
which may be illegal or unethical.  The Code of Ethics specifically prohibited any consideration 
given to a public official, unless authorized by law.  It also prohibited excessive payments to third 
parties when the value of the consideration offered or given exceeds the reasonable value of the 
services performed in return.  Specifically, the Code of Ethics warned that an excessive payment to 
an individual arranging contracts with government officials could be illegal or unethical as it might 
suggest that some of the payment is being channeled to government officials, or is somehow being 
used for improper purposes.  Finally, the Code of Ethics required all transactions to be executed 
only with management authority, general or specific, in compliance with federal securities laws 
that required GCC to maintain books, records, and accounts that accurately and fairly reflect 
transactions, and a system of internal accounting controls designed to provide reasonable 
assurances that GCC’s financial statements will be accurate and complete. 
6. In addition, at all relevant times, GCC’s E&M segment maintained a policy 
governing the payment of commissions or fees to third-party entities relating to sales contracts.  
This policy required the approval of E&M’s management for commissions to third-party entities 
greater than 5% of the value of the sales contracts.  The policy also prohibited commissions over 
10% of the value of the sales contracts. 
Condel’s Relationship With the Agent on Government Sales 
7. Beginning in May 2009, before Zimmer had any involvement with GCC’s business 
in Angola, Condel entered into a contract with the Agent for assistance with sales to Angolan 
SOEs.  The contract with the Agent did not specify any terms and conditions, except that Condel 
would pay the Agent a commission of 1% of the value of each sales contract with SOEs that may 
be revised on a case-by-case basis.  The contract did not did not include an anti-bribery clause for 
compliance with the FCPA.  The Agent was Condel’s sole agent for sales in Angola. 
GCC’s Investigation of the Agent 
8. In September 2012, GCC’s Internal Audit department (“Internal Audit”) performed 
an on-site audit of financial and operational processes and controls at Condel.  In December 2012, 
Internal Audit submitted a report to GCC’s executive management that identified several issues 
with Condel’s relationship with the Agent: (a) the agreement with the Agent did not include an 
anti-bribery clause for compliance with the FCPA; (b) the agreement with the Agent established a 
1% commission, but actual commissions paid to the Agent in 2012 ranged from 8.5 to 18.5%, 
although E&M’s policy prohibited commissions over 10%; (c) Condel’s management was not 
aware that contracts with agents should include language requiring compliance with the FCPA.  
Zimmer received a copy of this report in early 2013. 
9. In August 2013, GCC’s executive management commenced an internal 
investigation of Condel’s relationship with the Agent.  In October 2013, GCC’s executive 

 
 
4 
management instructed E&M’s management to cease payment of past due commissions to the 
Agent pending further investigation and without authorization by GCC’s executive management. 
Zimmer Approves Improper Payments to the Agent 
10. In October 2013, GCC promoted Zimmer as a Senior Vice President of GCC, and 
head of E&M’s supply chain.  As one of his many responsibilities in this capacity, Zimmer would 
supervise Condel’s operations, including its sales and marketing functions. 
11. By at least October 2013, Zimmer knew that GCC’s Code of Ethics prohibited, 
among other things, excessive payments to an individual arranging contracts with government 
officials as it might suggest that some of the payment is being channeled to government officials, 
or is somehow being used for an improper purpose.  Zimmer certified to GCC’s Legal Department 
that he had read and understood the Code of Ethics and he was and has been in compliance with 
the Code of Ethics since January 1, 2012. 
12. Further, by at least October 2013, Zimmer also was aware that Condel had paid 
commissions to the Agent between 8.5 to 18.5% , although E&M’s policy required approval of 
third-party commissions above 5%, and prohibited third-party commissions over 10%.  And he 
was aware that GCC was investigating Condel’s relationship with the Agent and had restricted the 
payment of past due commissions to the Agent without the approval of GCC’s executive 
management.  Zimmer instructed Condel’s management not to pay any commissions to the Agent 
while the investigation was pending, and informed Condel’s management that GCC’s executive 
management was considering replacing the Agent and limiting commissions to 10%. 
13. In November 2013, E&M’s management, including Zimmer, consulted GCC’s 
executive management on how to proceed with proposing new business to the Angolan SOEs in 
light of the investigation of the Agent.  The prohibition of commission payments to the Agent had 
resulted in a loss or potential loss of approximately $15 million in sales to the Angolan SOEs.  To 
avoid further loss of sales, E&M’s management asked GCC’s executive management whether 
Condel could continue to use the Agent in dealing with the SOEs, or whether Condel should use 
another agent or deal directly with the SOEs. 
14. GCC’s executive management instructed that (1) Condel should terminate the 
Agent and transition to a new agent, but (2) to allow time to transition to the new agent, Condel 
could work with the existing Agent on a case-by-case basis, until the new agent is in place, for new 
business with the SOEs, but with “appropriate” and “proper” commission payments to the Agent.  
E&M’s policy required E&M’ management’s approval of third-party commissions above 5% and 
prohibited commissions above 10%.  GCC’s executive management requested E&M’s 
management, including Zimmer, to follow up on these instructions and to lay out the process for 
dealing with the Agent while they transition to a new agent. 
15. Shortly thereafter, in November 2013, Zimmer approved sales contracts with the 
Angolan SOEs that called for commissions to the Agent from 7.5% to 18.5%   Further, in 
December 2013, Zimmer approved the payment of multiple past due commissions totaling 
$342,613 to the agent from 6 to 18% of the related sales contracts.  Zimmer did not follow up with 

 
 
5 
or seek advance approval from GCC’s executive management before knowingly approving these 
commissions.  These commissions violated GCC’s Code of Ethics, E&M’s policy on excessive 
payments to third-parties, and GCC executive management’s instructions. 
16. The new business with, and past due commissions to, the Agent were not supported 
by any documentation of the services performed by the Agent.  Condel nonetheless improperly 
recorded these payments as legitimate commissions on its books and records and financial 
statements.  Condel’s financial statements were ultimately included in GCC’s consolidated 
financial statements presented in GCC’s filings with the Commission for the quarterly and annual 
periods ended December 31, 2013. 
Legal Standards and Violations 
17. 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 of omission the person knew or should have known 
would contribute to such violation. 
18. As a result of the conduct described above, Zimmer caused GCC’s violation of 
Section 13(b)(2)(A) of the Exchange Act, which requires every issuer of a security registered 
pursuant to Section 12 of the Exchange Act to make and keep books, records, and accounts which, 
in reasonable detail, accurately and fairly reflect their transactions and dispositions of their assets.   
19. As a result of the conduct described above, Zimmer caused GCC’s violation of 
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.   
20. Finally, as a result of the conduct described above, Zimmer violated Section 
13(b)(5) of the Exchange Act, which states that no person shall knowingly circumvent or 
knowingly fail to implement a system of internal accounting controls or knowingly falsify any 
book, record, or account.  
IV.  
 
 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 
agreed to in Respondent’s Offer. 
 Accordingly, it is hereby ORDERED that: 

 
 
6 
A. Pursuant to Section 21C of the Exchange Act, Respondent cease-and-desist from 
committing or causing any violations and any future violations of Sections 13(b)(2)(A), 13(b)(2)(B), 
and 13(b)(5) of the Exchange Act. 
B. Respondent shall, within 14 days of the entry of this Order, pay a civil penalty in 
the amount of $20,000 to the Commission for transfer to the general fund of the United States 
Treasury, subject to Exchange Act Section 21F(g)(3).  If timely payment is not made, additional 
interest shall accrue pursuant to 31 U.S.C. § 3717.  
C. 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 
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 Karl 
J. Zimmer 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 Gerald W. Hodgkins, Associate 
Director, Division of Enforcement, Securities and Exchange Commission, 100 F Street, N.E., 
Washington, DC 20549.   
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, Respondent shall not argue that Respondent is entitled to, nor shall Respondent 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 Respondent 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. 

 
 
7 
V.  
 It is further Ordered that, solely for purposes of exceptions to discharge set forth in Section 
523 of the Bankruptcy Code, 11 U.S.C. §523, the findings in this Order are true and admitted by 
Respondent, and further, any debt for disgorgement, prejudgment interest, civil penalty or other 
amounts due by Respondent under this Order or any other judgment, order, consent order, decree 
or settlement agreement entered in connection with this proceeding, is a debt for the violation by 
Respondent of the federal securities laws or any regulation or order issued under such laws, as set 
forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. § 523(a)(19). 
 By the Commission. 
 
 
       Brent J. Fields 
       Secretary 
 

UNITED STATES OF AMERICA 

Before the 

SECURITIES AND EXCHANGE COMMISSION 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 79704 / December 29, 2016 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-17756 

 

 

In the Matter of 

 

KARL J. ZIMMER, 

 

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 Karl J. Zimmer (“Zimmer” 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 him and the subject matter of these 

proceedings, which are admitted, and except as provided herein in Section V, 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 finds1 that:  

Summary 

1. In November and December 2013, Zimmer, who was a Senior Vice President of 

General Cable Corporation (“GCC”), approved improper commission payments to a third-party 

agent (“Agent”) on sales by GCC’s Angolan subsidiary to Angolan state-owned enterprises 

(“SOEs”).  At the time, Zimmer knew that GCC’s policies prohibited excessive commissions to 

third parties on sales to SOEs, GCC had commenced an investigation of potentially improper 

payments to the Agent, and GCC had prohibited the payment of past due commissions to the 

Agent while the investigation was pending and without further approval.  Zimmer, however, 

approved multiple commissions to the Agent totaling $342,613, including commissions nearly 

double GCC’s prescribed limits on third-party commissions, and which were not documented by 

any services performed by the Agent.  By approving these commissions, Zimmer caused GCC’s 

violations of the books and records and internal accounting controls provisions of the Foreign 

Corrupt Practices Act of 1977 (“FCPA”), and knowingly circumvented a number of GCC’s 

internal accounting controls. 

Respondent 

2. Zimmer, age 40, is a resident of Douglas, Georgia.  Zimmer joined GCC in June 

2001 and was promoted, effective January 2014, to Senior Vice President of GCC’s Europe and 

Africa Supply Chain and Global Supply Chain, responsible for sales and marketing in those 

regions.  Zimmer’s employment with GCC ended in January 2015. 

Relevant Entities 

3. General Cable Corporation (“GCC”) is a publicly traded company headquartered 

in Highland Heights, Kentucky.  GCC is a global manufacturer of copper, aluminum, and fiber 

optic wire and cable products.  During the relevant period, GCC maintained operations in Angola 

within its Europe & Mediterranean segment (“E&M,” now known as the Europe segment).  GCC’s 

common stock is registered with the Commission under Section 12(b) of the Exchange Act, and 

GCC files annual and quarterly reports under Section 13(a) of the Exchange Act and related rules.  

GCC’s common stock trades on The New York Stock Exchange under the ticker symbol “BGC.” 

4. General Cable Condel, Cabos de Energia e Telecomunicações, S.A. (“Condel”) 

is an indirect GCC subsidiary located in Angola and manufactured and sold wire and cable 

products primarily to entities owned by the Angolan government. 

                                                 
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 

GCC’s Policies on Unlawful or Unethical Payments 

5. At all relevant times, GCC had a Code of Ethics and Compliance Guidelines 

(“Code of Ethics”) that prohibited its employees from offering or giving any person any payment 

which may be illegal or unethical.  The Code of Ethics specifically prohibited any consideration 

given to a public official, unless authorized by law.  It also prohibited excessive payments to third 

parties when the value of the consideration offered or given exceeds the reasonable value of the 

services performed in return.  Specifically, the Code of Ethics warned that an excessive payment to 

an individual arranging contracts with government officials could be illegal or unethical as it might 

suggest that some of the payment is being channeled to government officials, or is somehow being 

used for improper purposes.  Finally, the Code of Ethics required all transactions to be executed 

only with management authority, general or specific, in compliance with federal securities laws 

that required GCC to maintain books, records, and accounts that accurately and fairly reflect 

transactions, and a system of internal accounting controls designed to provide reasonable 

assurances that GCC’s financial statements will be accurate and complete. 

6. In addition, at all relevant times, GCC’s E&M segment maintained a policy 

governing the payment of commissions or fees to third-party entities relating to sales contracts.  

This policy required the approval of E&M’s management for commissions to third-party entities 

greater than 5% of the value of the sales contracts.  The policy also prohibited commissions over 

10% of the value of the sales contracts. 

Condel’s Relationship With the Agent on Government Sales 

7. Beginning in May 2009, before Zimmer had any involvement with GCC’s business 

in Angola, Condel entered into a contract with the Agent for assistance with sales to Angolan 

SOEs.  The contract with the Agent did not specify any terms and conditions, except that Condel 

would pay the Agent a commission of 1% of the value of each sales contract with SOEs that may 

be revised on a case-by-case basis.  The contract did not did not include an anti-bribery clause for 

compliance with the FCPA.  The Agent was Condel’s sole agent for sales in Angola. 

GCC’s Investigation of the Agent 

8. In September 2012, GCC’s Internal Audit department (“Internal Audit”) performed 

an on-site audit of financial and operational processes and controls at Condel.  In December 2012, 

Internal Audit submitted a report to GCC’s executive management that identified several issues 

with Condel’s relationship with the Agent: (a) the agreement with the Agent did not include an 

anti-bribery clause for compliance with the FCPA; (b) the agreement with the Agent established a 

1% commission, but actual commissions paid to the Agent in 2012 ranged from 8.5 to 18.5%, 

although E&M’s policy prohibited commissions over 10%; (c) Condel’s management was not 

aware that contracts with agents should include language requiring compliance with the FCPA.  

Zimmer received a copy of this report in early 2013. 

9. In August 2013, GCC’s executive management commenced an internal 

investigation of Condel’s relationship with the Agent.  In October 2013, GCC’s executive 



 

 4 

management instructed E&M’s management to cease payment of past due commissions to the 

Agent pending further investigation and without authorization by GCC’s executive management. 

Zimmer Approves Improper Payments to the Agent 

10. In October 2013, GCC promoted Zimmer as a Senior Vice President of GCC, and 

head of E&M’s supply chain.  As one of his many responsibilities in this capacity, Zimmer would 

supervise Condel’s operations, including its sales and marketing functions. 

11. By at least October 2013, Zimmer knew that GCC’s Code of Ethics prohibited, 

among other things, excessive payments to an individual arranging contracts with government 

officials as it might suggest that some of the payment is being channeled to government officials, 

or is somehow being used for an improper purpose.  Zimmer certified to GCC’s Legal Department 

that he had read and understood the Code of Ethics and he was and has been in compliance with 

the Code of Ethics since January 1, 2012. 

12. Further, by at least October 2013, Zimmer also was aware that Condel had paid 

commissions to the Agent between 8.5 to 18.5% , although E&M’s policy required approval of 

third-party commissions above 5%, and prohibited third-party commissions over 10%.  And he 

was aware that GCC was investigating Condel’s relationship with the Agent and had restricted the 

payment of past due commissions to the Agent without the approval of GCC’s executive 

management.  Zimmer instructed Condel’s management not to pay any commissions to the Agent 

while the investigation was pending, and informed Condel’s management that GCC’s executive 

management was considering replacing the Agent and limiting commissions to 10%. 

13. In November 2013, E&M’s management, including Zimmer, consulted GCC’s 

executive management on how to proceed with proposing new business to the Angolan SOEs in 

light of the investigation of the Agent.  The prohibition of commission payments to the Agent had 

resulted in a loss or potential loss of approximately $15 million in sales to the Angolan SOEs.  To 

avoid further loss of sales, E&M’s management asked GCC’s executive management whether 

Condel could continue to use the Agent in dealing with the SOEs, or whether Condel should use 

another agent or deal directly with the SOEs. 

14. GCC’s executive management instructed that (1) Condel should terminate the 

Agent and transition to a new agent, but (2) to allow time to transition to the new agent, Condel 

could work with the existing Agent on a case-by-case basis, until the new agent is in place, for new 

business with the SOEs, but with “appropriate” and “proper” commission payments to the Agent.  

E&M’s policy required E&M’ management’s approval of third-party commissions above 5% and 

prohibited commissions above 10%.  GCC’s executive management requested E&M’s 

management, including Zimmer, to follow up on these instructions and to lay out the process for 

dealing with the Agent while they transition to a new agent. 

15. Shortly thereafter, in November 2013, Zimmer approved sales contracts with the 

Angolan SOEs that called for commissions to the Agent from 7.5% to 18.5%   Further, in 

December 2013, Zimmer approved the payment of multiple past due commissions totaling 

$342,613 to the agent from 6 to 18% of the related sales contracts.  Zimmer did not follow up with 



 

 5 

or seek advance approval from GCC’s executive management before knowingly approving these 

commissions.  These commissions violated GCC’s Code of Ethics, E&M’s policy on excessive 

payments to third-parties, and GCC executive management’s instructions. 

16. The new business with, and past due commissions to, the Agent were not supported 

by any documentation of the services performed by the Agent.  Condel nonetheless improperly 

recorded these payments as legitimate commissions on its books and records and financial 

statements.  Condel’s financial statements were ultimately included in GCC’s consolidated 

financial statements presented in GCC’s filings with the Commission for the quarterly and annual 

periods ended December 31, 2013. 

Legal Standards and Violations 

17. 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 of omission the person knew or should have known 

would contribute to such violation. 

18. As a result of the conduct described above, Zimmer caused GCC’s violation of 

Section 13(b)(2)(A) of the Exchange Act, which requires every issuer of a security registered 

pursuant to Section 12 of the Exchange Act to make and keep books, records, and accounts which, 

in reasonable detail, accurately and fairly reflect their transactions and dispositions of their assets.   

19. As a result of the conduct described above, Zimmer caused GCC’s violation of 

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.   

20. Finally, as a result of the conduct described above, Zimmer violated Section 

13(b)(5) of the Exchange Act, which states that no person shall knowingly circumvent or 

knowingly fail to implement a system of internal accounting controls or knowingly falsify any 

book, record, or account.  

IV.  
 

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

agreed to in Respondent’s Offer. 

 Accordingly, it is hereby ORDERED that: 



 

 6 

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

committing or causing any violations and any future violations of Sections 13(b)(2)(A), 13(b)(2)(B), 

and 13(b)(5) of the Exchange Act. 

B. Respondent shall, within 14 days of the entry of this Order, pay a civil penalty in 

the amount of $20,000 to the Commission for transfer to the general fund of the United States 

Treasury, subject to Exchange Act Section 21F(g)(3).  If timely payment is not made, additional 

interest shall accrue pursuant to 31 U.S.C. § 3717.  

C. 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 

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 Karl 

J. Zimmer 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 Gerald W. Hodgkins, Associate 

Director, Division of Enforcement, Securities and Exchange Commission, 100 F Street, N.E., 

Washington, DC 20549.   

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, Respondent shall not argue that Respondent is entitled to, nor shall Respondent 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 Respondent 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. 



 

 7 

V.  

 It is further Ordered that, solely for purposes of exceptions to discharge set forth in Section 

523 of the Bankruptcy Code, 11 U.S.C. §523, the findings in this Order are true and admitted by 

Respondent, and further, any debt for disgorgement, prejudgment interest, civil penalty or other 

amounts due by Respondent under this Order or any other judgment, order, consent order, decree 

or settlement agreement entered in connection with this proceeding, is a debt for the violation by 

Respondent of the federal securities laws or any regulation or order issued under such laws, as set 

forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. § 523(a)(19). 

 By the Commission. 

 

 

       Brent J. Fields 

       Secretary