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 | Enforcement Action Dataset

Stanford Foreign Corrupt Practices Act Clearinghouse a Collaboration with Sullivan & Cromwell LLP

Enforcement Action Dataset

 
In the Matter of Elbit Imaging Ltd. · Elbit Imaging's Involvement in Romania

Case Information

In the Matter of Elbit Imaging Ltd.

Related FCPA Matter:   Elbit Imaging's Involvement in Romania Information

Case Information

Initiation Date:    03/09/2018  Information

Prosecuting Agency:    U.S. Securities and Exchange Commission

Type of Action:    SEC Administrative Proceeding

Docket or Case Number:    3-18397

Name of Prosecuting Attorneys:   

  • John C. Lehmann, SEC Headquarters
  • Charles D. Riely, SEC Headquarters
  • Lara Shalov Mehraban, SEC New York Regional Office

US Assisting Agencies:   Unknown

Foreign Enforcement Action/Investigation:   Unknown

Foreign Assisting Agencies:   Unknown

Origin of the Proceeding:    Voluntary disclosure

Whistleblower:    Unknown

Case Status:    Resolved


Summary  Information

Elbit Imaging Ltd., headquartered and incorporated in Israel, was an international holding company with several direct and indirect subsidiaries focused on, among other industries, real estate investment and development. Elbit's shares were registered with the SEC and traded on the NASDAQ.

Plaza Centers NV was an indirect subsidiary of Elbit that was incorporated in the Netherlands. Plaza was a developer of Western-style shopping and entertainment centers in Central and Eastern Europe.

According to the cease and desist order, between 2007 and 2012, Elbit and Plaza paid approximately $27 million to third-party offshore consultants and sales agents for services related to a real estate development project in Bucharest, Romania, and the sale of a large portfolio of real estate assets in the U.S. The payments were made despite a lack of evidence that the consultants and sales agents actually provided the services, and Elbit and Plaza characterized these payments in their books and records as legitimate business expenses even though some or all of the funds may have been used to make illicit payments to Romanian government officials in the case of the development project in Bucharest or were possibly embezzled in the case of the sale of the real estate portfolio.

In an administrative proceeding on March 9, 2018, the SEC issued a cease and desist order against Elbit. Though the company neither admitted nor denied the facts stated in the order, Elbit agreed to cease and desist violations of the books and records and internal controls provisions of the FCPA and further agreed to pay a civil fine of $500,000. The SEC noted the company's voluntary disclosure, cooperation, and remediation in the matter.

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