Earlier today, Oracle Corp. reached an agreement with SEC regarding their financial practices in India. The SEC claims Oracle violated the Foreign Corrupt Practices Act when by setting aside funds and keeping them off the books. This money was then being sent to phony vendors and could potentially be used for bribes. Oracle cooperated with the SEC investigation and cam to an agreement on a $2 million settlement. To learn more about this case, keep reading.
When Did It Occur?
According to a complain filed by the SEC, certain employees of Oracle Corp. India were able to structure their payments and revenue so that $2.2 million went unnoticed between the years of 2005 and 2007. Without this money being on the books, there’s a possibility of it being used for bribes and embezzlement, said the SEC.
About The Incident
The report states that employees working in the Oracle Corp. branch of India were able to make unauthorized payments to fake vendors, complete with fake invoices all the necessary paperwork. There was a total of 14 transactions which are believed to have been fake. Marc Fagel of the SEC stated “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.”
It’s important to note that not all of Oracle’s employees are responsible for the SEC incident. Oracle spokesperson, Deborah Hellinger, announced that the company has already taken the necessary action to fire those responsible for hiding the funds.
Because Oracle has agreed to a $2 million settlement, they wont be going to trial over the “money hiding” incident. In addition, Oracle has complied with of the SEC’s investigation to help resolve the manner in a timely manner. Even though Oracle is paying the $2 million settlement, they aren’t admitting or denying the allegations set forth by the SEC probe.
How Will This Affect Oracle?
It’s doubtful this will have any real effect on Oracle’s everyday business operations. As you can expect, $2 million is pocket change to the world’s largest data provider. Of course one thing that may change is how they manage and hire employees. Like all companies, there are some bad apples that hinder the integrity and overall well-being of Oracle. Thankfully, though, Oracle has cleaned out the employees responsible for the incident that sent their company into problematic situation. Although it cost them $2 million, they are now free of any other charges and have gotten rid of the employees.