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Richard L. Cassin Publisher and Editor

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Jessica Tillipman Senior Editor

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Elizabeth K. Spahn Editor Emeritus

Cody Worthington Contributing Editor

Julie DiMauro Contributing Editor

Thomas Fox Contributing Editor

Marc Alain Bohn Contributing Editor

Bill Waite Contributing Editor

Shruti J. Shah Contributing Editor

Russell A. Stamets Contributing Editor

Richard Bistrong Contributing Editor 

Eric Carlson Contributing Editor

Bill Steinman Contributing Editor

Aarti Maharaj Contributing Editor


FCPA Blog Daily News

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Monday
Mar122018

SEC charges Israeli company with FCPA offenses

Elbit Imaging LTD. agreed Friday to pay $500,000 to settle violations of the FCPA books and records and the internal controls provisions.

Israel-based Elbit and its subsidiary, Plaza Centers NV, paid millions of dollars to third-party offshore consultants and a sales agent "for services," without knowing if the services were ever provided.

The payments were in connection with a real estate development project in Romania and the sale of a large portfolio of real estate assets in the United States.

The SEC resolved the case Friday through an internal administrative order (pdf) and didn't go to court.

Elbit first disclosed the investigation in an SEC filing in April 2016, according to FCPA Tracker.

The company said then the board of Plaza Centers "had become aware of certain issues with respect to certain agreements that were executed in the past by PC in connection with the Casa Radio Project in Romania."

Elbit is a conglomerate with subsidiaries focused on real estate investment and development in hotels, retail space, and malls. The company also has a medical imaging division.

The SEC said Friday that Elbit and Central Plaza "failed to devise and maintain sufficient internal accounting controls to provide reasonable assurances that the companies’ funds would only be used as authorized, rather than the funds being embezzled or used to make corrupt payments." 

The companies also "failed to record these payments in their books and records accurately in a manner that fairly reflected the true nature of the payments," the SEC said.

Elbit resolved the SEC's charges without admitted or denying the findings.

The SEC said it took into account Elbit’s self-reporting, cooperation, and remedial acts.

The agency said it also considered "that Elbit is in the process of selling its principal assets in order to service its debt obligations, and does not develop current or new businesses."

Elbit Imaging LTD. trades on the Tel Aviv Stock Exchange and NASDAQ under the symbol EMITF.

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Richard L. Cassin is the publisher and editor of the FCPA Blog.