Litigation Release No. 23726 / January 25, 2017

Securities and Exchange Commission v. Mathias Francisco Sandoval Herrera, Maria D. Cidre, and Jose Antonio Miranda Gonzalez, No. 17-cv-20301-JAL (S.D. Fl. filed Jan. 24, 2017)

SEC Charges Former Executives of Wire and Cable Company with Financial Fraud

The Securities and Exchange Commission today announced fraud and other charges against a former executive vice president and senior vice president of General Cable Corporation (GCC), a publicly traded manufacturer of wire and cable products.

In a complaint filed yesterday in Miami federal court, the SEC alleges that Mathias Francisco Sandoval Herrera of Doral, Florida, and Maria D. Cidre of Weston, Florida, former chief executive officer and chief financial officer of GCC's Rest of World (ROW) segment, fraudulently concealed from GCC's executive management inventory accounting errors at GCC's subsidiary in Brazil. Beginning in January 2012, Sandoval and Cidre allegedly became aware of potential overstatement of inventory by tens of millions of dollars and allegations of an inventory theft scheme by the subsidiary's employees. Instead of disclosing these matters to GCC, the SEC contends that Sandoval and Cidre deliberately omitted them from required reports and certifications to executive management. Sandoval and Cidre also allegedly directed their subordinates to destroy documents and to conceal the accounting problems from others within GCC, including internal auditors. The improper accounting allegedly caused GCC to overstate its inventory balance by more than $40 million, and resulted in a restatement of its financial statements.

The SEC's complaint charges Sandoval and Cidre with violating, and aiding and abetting GCC's and each other's violations of, Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, as well as books and records and reporting violations. The SEC seeks permanent injunctions, civil money penalties, disgorgement of ill-gotten gains, and officer-and-director bars against Sandoval and Cidre.

The SEC's complaint also charges Jose Antonio Miranda Gonzalez, a former GCC senior vice president of Latin America operations, with aiding and abetting the fraud allegedly perpetrated by Sandoval and Cidre. Without admitting or denying the complaint's allegations, Miranda consented to the entry of a final judgment enjoining him from violating Exchange Act Sections 10(b) and 13(b)(5), Exchange Act Rule 10b-5 and 13b2-1, and Securities Act Section 17(a), and from aiding and abetting any violations of Exchange Act Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B), and Exchange Act Rules 12b-20, 13a-1, 13b2-1, and 13a-13, with the amount of any civil penalty or the length of any officer-and-director bar to be determined at a later date. The settlement is subject to court approval. Miranda also has agreed to cooperate with the SEC in its litigation against Sandoval and Cidre.

In December 2016, GCC agreed to pay a $6.5 million penalty to the SEC to settle charges relating to the inventory accounting errors.

The SEC's investigation was conducted by Rachel Nonaka, Colin Rand, Eric Hubbs, Mark Oh, and David Johnson, and supervised by Anita Bandy and Kristen Dieter. The litigation is being led by Mr. Johnson and Olivia Choe, and supervised by Bridget Fitzpatrick.

For more information, see Press Release 2016-283 (Dec. 29, 2016).

SEC Complaint