The amount was subsequently disbursed through eight invoices for payment to third-party vendors, which were later found to be fake, and none of the third-party vendors were approved by Oracle and were in fact just storefronts, SEC said in its complaint.
"As directed by the Oracle India employees, the distributor sent out the third party payments, which created the potential that they could be used for bribery or embezzlement," SEC said.
The FCPA makes it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business. It also requires companies whose securities are listed in the U.S. to meet its accounting provisions, including requiring companies to devise and maintain an adequate system of internal controls.
Oracle failed to implement or maintain a system of effective internal accounting controls to prevent improper side funds, the SEC said in its complaint.
The SEC has not made explicit allegations of either bribery or embezzlement in this case, nor has it specified who actually received the secret payments.
Oracle could not be immediately reached for comment.
By November 2007, Oracle India's senior channel sales manager had resigned and left the company. Four other employees were sacked by Oracle after an internal investigation, according to the complaint.
The settlement takes into account Oracle's voluntary disclosure of the conduct in India and its cooperation with the SEC's investigation, as well as remedial measures taken by the company, including firing the employees involved in the misconduct and making significant enhancements to its FCPA compliance program, the agency said.
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