A $2 million fine will be paid by Oracle Corp to settle charges from the U.S. Securities and Exchange Commission. The charges from the SEC claim that a subsidiary of Oracle in India put money aside to make unauthorized payments to fake vendors in India. The settlement by Oracle, which did not admit doing anything wrong, settles charges that claim the company violated the Foreign Corrupt Practices Act.
The complaint filed against Oracle by the SEC in federal court in San Francisco claims that from 2005 to 2007, employees for Oracle India Private Ltd put together structured transactions with the government of India. Those transactions permitted distributors to hold $2.2 million of proceeds, “creating the potential for bribery or embezzlement.”
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In the complaint filed by the SEC, employees told distributors to issue unauthorized payments to vendors, some of whom do not even work for Oracle. The complaint also said that a handful of the payments were documented using false invoices. The complaint also stated that the money set aside happened 14 times and covered eight government contracts. The books and records for Oracle never accounted for them either.
“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,” Marc Fagel, director of the SEC regional office in San Francisco, said.
The employees who set the money aside have reportedly been fired, according to Deborah Hellinger. Hellinger is a spokeswoman for Oracle. Hellinger also said that the company cooperated with the SEC and investigators.
Posted by Jim Vassallo
on August 17, 2012. Filed under Business News,Oracle.
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