Harry Cassin Publisher and Editor

Andy Spalding Senior Editor

Jessica Tillipman Senior Editor

Richard L. Cassin Editor at Large

Elizabeth K. Spahn Editor Emeritus 

Cody Worthington Contributing Editor

Julie DiMauro Contributing Editor

Thomas Fox Contributing Editor

Marc Alain Bohn Contributing Editor

Bill Waite Contributing Editor

Shruti J. Shah Contributing Editor

Russell A. Stamets Contributing Editor

Richard Bistrong Contributing Editor 

Eric Carlson Contributing Editor

Bill Steinman Contributing Editor

Aarti Maharaj Contributing Editor

FCPA Blog Daily News

« Peterson Sentenced To Nine Months | Main | Job Openings At The World Bank »

Oracle Settles SEC Charges 

Oracle Corporation on Thursday agreed to pay a $2 million civil penalty to the SEC to settle FCPA charges arising from a slush fund in India used to pay bribes.

The SEC said California-based Oracle 'failed 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 sells enterprise solutions software. The offenses occurred from 2005 to 2007.

Oracle structured transactions with India's government in a way that enabled its India distributors to hold $2.2 million of the proceeds in unauthorized side funds, the SEC said.

The India employees then directed the distributors to make payments from the slush fund to purported local vendors. Many were merely storefronts that didn't provide any services to Oracle, the SEC said. Oracle's subsidiary documented some of the payments with fake invoices.

'Through its subsidiary's use of secret cash cushions, Oracle exposed itself to the risk that these hidden funds would be put to illegal use,' said Marc J. Fagel, director of the SEC's San Francisco Regional Office. 'It is important for U.S. companies to proactively establish policies and procedures to minimize the potential for payments to foreign officials or other unauthorized uses of company funds.'

Oracle violated the FCPA's books and records and internal controls provisions, the SEC said. The company failed to accurately record the side funds parked with distributors. Oracle also failed to devise and maintain a system of effective internal controls that would have prevented the improper use of company funds, the SEC said.

The SEC said 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.'

The DOJ didn't announce any criminal charges against Oracle.

*     *     *

View the SEC's Litigation Release No. 22450 in Securities and Exchange Commission v. Oracle Corp., Civil Action No. CV-12-4310 CRB (N.D.Cal. August 16, 2012) here.

Download the SEC's civil complaint against Oracle Corporation here.

References (1)

References allow you to track sources for this article, as well as articles that were written in response to this article.
  • Response
    Well, thats the reason why I love Oracle. That's the best ever.! Thanks for the share.

Reader Comments

There are no comments for this journal entry. To create a new comment, use the form below.

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
All HTML will be escaped. Hyperlinks will be created for URLs automatically.