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SEC slaps Oracle with $23m fine for alleged bribery

SEC slaps Oracle with $23m fine for alleged bribery

The Securities and Exchange Commission (SEC) has announced settled charges requiring Oracle to pay $23 million, following the company’s violation of provisions in the Foreign Corrupt Practices Act (FCPA).

The SEC states that Oracle subsidiaries in Turkey, the United Arab Emirates (UAE) and India violated the FCPA by creating and using slush funds to bride foreign officials in return for business between 2016 and 2019.

According to the SEC, slush funds were used by subsidiaries in Turkey and UAE to pay foreign officials to attend technology conferences in violation of the companies own policies and procedures. Additionally, it found that some employees of Oracle’s Turkish subsidiary used funds for officials’ families to accompany them to international conferences or take side trips to California.

In 2012 the SEC sanctioned Oracle for the creation of slush funds. On that occasion, millions of dollars in slush funds were created by Oracle India, and created the risk those funds could be used for illicit purposes.

“The creation of off-book slush funds inherently gives rise to the risk those funds will be used improperly, which is exactly what happened here at Oracle’s Turkey, UAE, and India subsidiaries,” said Charles Cain, the SEC’s FCPA unit chief. “This matter highlights the critical need for effective internal accounting controls throughout the entirety of a company’s operations.”

Despite Oracle agreeing to cease and desist from committing violations of anti-bribery, books and records, and internal accounting controls provision of the FCPA, the software giant neither admitted or denied the findings. Approximately $8 million in disgorgement was paid in and a $15 million penalty.

Michael Egbert, Oracle corporate communications vice president commented: “The conduct outlined by the SEC is contrary to our core values and clear policies, and if we identify such behaviour, we will take appropriate action.”

The SEC’s investigation was conducted by Samantha Martin and Laura Bennett and supervised by David Reece. The SEC appreciates the assistance of the Capital Markets Board of Turkey, Emirates Securities and Commodities Authority, and the Securities and Exchange Board of India.

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