Last week, Oracle paid $2 million to the U.S. Securities and Exchange Commission to settle Foreign Corrupt Practices Act charges relating to a slush fund in India. Oracle, a technology company with a reputation for taking compliance seriously, voluntarily disclosed to the SEC that its subsidiary was maintaining funds off the books. Ultimately, the SEC concluded that the “payments created the risk that the funds could be used for illicit purposes such as bribery or embezzlement.” There was no actual finding of bribery.
It is easy to understand why the SEC and U.S. Department of Justice encourage the voluntary disclosure of actual or potential violations of the FCPA. Companies that walk through the DOJ’s front door to disclose wrongdoing arrive ready to cooperate and, ultimately, ready to settle. The DOJ can bring and resolve more enforcement actions with fewer resources and in less time. In addition, in light of the companies’ initial conciliatory gesture of disclosure, it’s reasonable to assume that the company will cooperate fully. This enables the DOJ to guide and oversee a comprehensive investigation run by private practitioners and funded by the company, as opposed to by the government.
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