Oracle To Pay $23 Million To Settle SEC Bribery Case

Software giant Oracle is not admitting or denying wrongdoing, but is to pay $23m to settle a second SEC bribery case

Enterprise software giant Oracle has agreed to pay $23 million to settle “charges that it violated provisions of the Foreign Corrupt Practices Act (FCPA).”

The US Securities and Exchange Commission announced the multi million dollar settlement on Tuesday, which has seen Oracle not admitting or denying wrongdoing in agreeing to settle.

The fine stems from charges made by Oracle’s subsidiaries in Turkey, the United Arab Emirates and India, which the SEC said created and used slush funds to bribe foreign officials in return for business between 2016 and 2019.


Bribery charges

According to the SEC’s order, Oracle subsidiaries in Turkey and UAE also used the slush funds to pay for foreign officials to attend technology conferences in violation of Oracle policies and procedures.

The order found that in some instances, employees of the Turkey subsidiary used these funds for the officials’ families to accompany them on international conferences or take side trips to California.

“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,” said Cain.

Without admitting or denying the SEC’s findings, Oracle agreed to cease and desist from committing violations of the anti-bribery, books and records, and internal accounting controls provisions of the FCPA and to pay approximately $8 million in disgorgement and a $15 million penalty.

Other cases

This is the second time that the SEC has charged Oracle for violating the federal Foreign Corrupt Practices Act, an anti-bribery law.

The Foreign Corrupt Practices Act of 1977 makes it illegal for certain persons and entities to “make payments to foreign government officials to assist in obtaining or retaining business.”

In 2011 Silicon UK reported that Oracle was facing federal anti-bribery charges for violating anti-bribery laws in Western and central African countries.

A year later in 2012 Oracle agreed to pay a $2 million fine to settle the SEC charges concerning the creation of millions of dollars of unauthorised side funds by Oracle India from 2005 to 2007.

But Oracle is not the only tech player to be exposed for financial misconduct like this.

In March 2018 German software giant SAP admitted “misconduct”, after an internal investigation into a number of public sector deals in South Africa showed that ‘payments’ were made to close friends of the former President Jacob Zuma.

In December 2019 the Swedish telecommunications equipment giant Ericsson agreed to pay more than $1 billion (£760m) to settle a probe into alleged corruption including bribing public officials, the US Department of Justice said.