The Securities and Exchange Commission has slapped Telefônica Brasil, a subsidiary of Spanish multinational broadband and telecommunications provider Telefônica, with a $4.13 million civil penalty for improperly accounting for the purchase of tickets and hospitality to government officials.

According to the SEC administrative proceeding, Telefônica Brasil had a general code of ethics that “explicitly prohibited offering or accepting gifts, hospitality, or other types of incentives, ‘which may reward or influence a business decision,’ as well as a policy that donations would not be made if linked with political activity.” Yet, Telefônica Brasil “lacked internal accounting controls sufficient to implement or maintain these policies and prevent giving things of value, like World Cup tickets, to government officials where such gifts might influence or reward an official decision,” the SEC said.

As a result, with the approval of senior managers, Telefônica Brasil offered such tickets and hospitality to government officials directly involved in, or in a position to influence, regulatory matters, legislation, and other business efforts of benefit to the company. In total, $5.1 million in World Cup ticket purchases was paid in three installments in 2012, 2013, and 2014, and approximately $428,000 for a Confederation Cup ticket purchase was paid in two installments in 2013.

Moreover, Telefônica Brasil failed to properly characterize the purchase of tickets and related hospitality that were given to government officials, according to the SEC’s administrative proceeding. It recorded the purchases and hospitality as being for general advertising and publicity purposes when, in fact, those tickets and related hospitality were given to government officials.

Thus, Telefônica Brasil violated Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act by (1) improperly recording the purchase of tickets and hospitality that were given to government officials and (2) failing to devise and maintain sufficient internal accounting controls to detect and prevent the making of improper payments to foreign officials.

In determining to accept the offer, the SEC said it considered the remedial acts promptly undertaken by the company. “Telefonica Brasil’s remediation included enhancing its internal accounting controls and compliance functions and adopting a new anti-corruption policy and compliance structure,” the SEC said.

The SEC said it further credited the company with cooperation credit. According to the administrative proceeding, “Telefônica Brasil’s cooperation included timely sharing of facts developed during the course of an internal investigation by its board and voluntarily producing and translating documents.”