Securities and Exchange Commission v. Oracle Corp., 12-CV-4310 CRB (N.D. Cal.). On August 16, 2012, the SEC announced settled FCPA charges against Oracle Corporation. Between 2005 and 2007, employees of Oracle’s Indian subsidiary Oracle India Private Limited (“Oracle India”) secretly kept a portion of the proceeds from sales to the Indian government and put the money to improper use, allowing for potential bribery and embezzlement. The Oracle India employees arranged certain transactions so that about $2.2 million was held by the Company’s distributors and kept off Oracle India’s corporate books. The Oracle India employees directed its distributor to disburse payments out of the unauthorized side funds to so-called local “vendors.” Several of the “vendors” were merely storefronts that did not provide any services. Oracle did not accurately record these side funds on the Company’s books and records, and failed to implement or maintain a system of effective internal accounting controls to prevent improper side funds in violation of the FCPA, which requires public companies to keep books and records that accurately reflect their operations.
Oracle is charged with violating Sections 13(b)(2)(A) and (B) of the Exchange Act. Oracle has agreed to settle the SEC’s charges without admitting or denying the allegations by consenting to the entry of a final judgment permanently enjoining it from violating Sections 13(b)(2)(A) and (B) of the Exchange Act, and requiring it to pay a $2 million civil penalty. 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.