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Univ. of Toledo College of Law

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Thursday, August 16, 2012

Oracle Agrees to Pay $2 Million to Settle FCPA Charges Against India Subsidiary

The 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. Oracle agreed to pay a $2 million penalty to settle the SEC's charges.

The SEC alleges that employees of the India subsidiary 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. Those Oracle India employees then directed the distributors to make payments out of these side funds to purported local vendors, several of which were merely storefronts that did not provide any services to Oracle. Oracle's subsidiary documented certain payments with fake invoices.  According to the SEC's complaint filed in U.S. District Court for the Northern District of California, the misconduct occurred from 2005 to 2007.

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.

http://lawprofessors.typepad.com/securities/2012/08/oracle-agrees-to-pay-2-million-to-settle-fcpa-charges-against-india-subsidiary.html

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