Oracle Corp Settles SEC Charges Over Secret India Payments- Reuters

Reuters reported that Oracle Corp agreed to pay a $2 million fine to settle U.S. Securities and Exchange Commission charges that an India subsidiary secretly set aside money used to make unauthorized payments to phony vendors in India. August 16's settlement, which involved no admission of wrongdoing, resolved charges that the software company violated the federal Foreign Corrupt Practices Act. In a complaint filed with the federal court in San Francisco, the SEC said that between 2005 and 2007, employees of Oracle India Private Ltd structured transactions with India's government that allowed distributors to 'park' $2.2 million of proceeds, 'creating the potential for bribery or embezzlement.' The SEC said the employees directed the distributors to make unauthorized payments to local vendors, several of which did no work for Oracle, and that some payments were documented with fake invoices. It said the set asides occurred approximately 14 times and concerned eight government contracts, and that Oracle's books and records did not properly account for them. '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 in a statement. The case is among the earliest in which the SEC brought FCPA charges that did not allege actual bribery of foreign officials, but rather only the potential for bribery.