Oracle pays $ 2mn SEC penalty for corruption

The Securities and Exchange Commission (SEC) charged Oracle Corporation with violating the Foreign Corrupt Practices Act (FCPA) by failing to prevent a subsidiary from secretly setting aside money off the company’s books that was eventually used to make unauthorized payments to phony vendors in India.

According to the SEC complaint, the unauthorized funds that existed between 2005 and 2007 amounted to around $ 2.2 million. SEC said that Oracle India in May 2006 secured a $3.9-million deal with the Ministry of Information Technology and Communications.

The SEC alleges that certain employees of the India subsidiary of the Redwood Shores, Calif.-based enterprise systems firm structured transactions with India’s government on more than a dozen occasions in a way that enabled Oracle India’s distributors to hold approximately $2.2 million of the proceeds in unauthorized side funds.

Without admitting or denying the SEC’s allegations, Oracle consented to the entry of a final judgment ordering the company to pay the $2 million penalty and permanently enjoining it from future violations of these provisions.
The settlement takes into account Oracle’s voluntary disclosure of the conduct in India and its cooperation with the SEC’s investigation, as well as remedial measures taken by the company, including firing the employees involved in the misconduct and making significant enhancements to its FCPA compliance program.

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