UPDATE 1-Sun Micro says may have violated U.S. bribery law

*Sun says may have broken law on bribing foreign officials

*Sun says resolution of matter could hurt business results

*Oracle says aware of matter before agreeing to buy Sun (Adds Oracle comment)

By Jim Finkle

BOSTON, May 8 (Reuters) - Sun Microsystems Inc (JAVA.O), a hardware maker that Oracle Corp (ORCL.O) is buying for more than $7 billion, may have broken a U.S. law prohibiting companies from bribing foreign officials, Sun said in a regulatory filing on Friday.

"We have identified potential violations of the Foreign Corrupt Practices Act, the resolution of which could possibly have a material effect on our business," Sun said in a 10-Q filing with the U.S. Securities and Exchange Commission.

Oracle spokeswoman Deborah Hellinger said Oracle was aware of the matter before it agreed to buy Sun.

Sun spokesman Shawn Dainas said he could not immediately elaborate on the 10-Q filing.

Potential penalties could include fines, criminal sanctions and a ban from doing business with the U.S. federal government, Sun said. The federal government is one of Sun's biggest customers.

The company, based in Santa Clara, California, said it had disclosed the activities to the U.S. Department of Justice as well as the SEC. It has hired outside attorneys to help it investigate the matter, which it discovered in its current fiscal year that began in July 2008.

Sun said it had also brought the matter to the attention of government agencies in the country where the questionable activities had occurred, though it did not identify that country.

"The outcome of these, or any future matters, cannot be predicted," Sun said in the filing.

The company said that if the acquisition falls through it might be required to pay a $260 million breakup fee and reimburse Oracle up to $45 million in expenses.

Sun's stock rose 3 cents to $9.13 in afternoon Nasdaq trade. Shares of Oracle, based in Redwood City, California, fell 10 cents to $18.32. (Reporting by Jim Finkle; Editing by Derek Caney, Toni Reinhold)