Sun Admits To Bribery Infringement

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Oracle, which intends to acquire Sun and doesn’t appear to be worried, said it knew about the report before it tendered its $7.4 billion offer

Sun Microsystems admitted in its quarterly earnings report that it may have broken international anti-bribery laws in an incident that happened outside the United States.

The Santa Clara, Calif.-based IT systems company did not specify where or when the illegal activity took place or who may have committed the infraction.

Although there is no indication at this time how serious the potential offense might be, it apparently is not enough to worry enterprise database maker Oracle, which announced 20 April that it intends to acquire Sun. Oracle said it knew about the report before it tendered its $7.4 billion (£4.9m) offer to Sun’s board of directors.

In its first-quarter earnings report on 28 April, Sun reported that it found “potential violations” of the Foreign Corrupt Practices Act of 1977, which prohibits publicly traded U.S. companies from bribing foreign government officials to get an inside track on obtaining new business.

The company did not reveal any other details of the incident in the first-quarter report, except that it “took remedial action” and alerted the Justice Department and the Securities and Exchange Commission as required by law.

If a violation is found, legal remediation can range from a fine to criminal charges to a potential block on working with federal government agencies—for decades a major source of Sun’s revenue.

The story first came to light in a report in the Wall Street Journal 8 May. A Sun spokesperson had no comment.

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