Sun admits breaking anti-bribery laws
May 12, 2009 | 10:12
Companies: #oracle #sun #sun-microsystems
Oracle might have bitten off more than it can chew in its recent acquisition of Sun, with the revelation that Sun has broken anti-bribery laws that could see it landing in some seriously hot water.
According to a report over on Fudzilla, Sun has declared in its most recent regulatory filing that it has discovered “potential violations” of the US Foreign Corrupt Practices Act.
The FCPA is designed to prohibit companies based in the US – or that have stock traded on a US market – from bribing officials in foreign governments. Although Sun isn't claiming it has carried out any illegitimate activities within US borders, the FCPA would apply to bribery carried out in other countries because the company is based and traded in the US.
While Sun has been light on the details of the transgressions, it has declared that “remedial action” was taken as soon as the bribery was brought to light. In order to minimise damage, the company has alerted the US Justice Department and the Securities and Exchange Commission – both of whom have launched an investigation into the offences.
Sun has also declared that Oracle was aware of the issues prior to the agreement to purchase Sun for a massive $7.4 billion (£4.78 billion at the time) – but under US law Oracle could find itself being punished even if the offences occurred prior to the takeover.
Traditionally, the Securities and Exchange Commission has been quick to mete out harsh punishments to companies found guilty of both domestic and international bribery, with tech giant Siemens AG being forced to pay fines totalling $450 million when found guilty of offences under the Foreign Corrupt Practices Act at the end of last year. With a possible legal burden that heavy, could Larry Ellison be regretting his company's latest acquisition?
Should Sun be fined under US law for actions that occurred outside its borders, or is it what the companies deserves for stooping as low as bribery to get things done? Share your thoughts over in the forums.
According to a report over on Fudzilla, Sun has declared in its most recent regulatory filing that it has discovered “potential violations” of the US Foreign Corrupt Practices Act.
The FCPA is designed to prohibit companies based in the US – or that have stock traded on a US market – from bribing officials in foreign governments. Although Sun isn't claiming it has carried out any illegitimate activities within US borders, the FCPA would apply to bribery carried out in other countries because the company is based and traded in the US.
While Sun has been light on the details of the transgressions, it has declared that “remedial action” was taken as soon as the bribery was brought to light. In order to minimise damage, the company has alerted the US Justice Department and the Securities and Exchange Commission – both of whom have launched an investigation into the offences.
Sun has also declared that Oracle was aware of the issues prior to the agreement to purchase Sun for a massive $7.4 billion (£4.78 billion at the time) – but under US law Oracle could find itself being punished even if the offences occurred prior to the takeover.
Traditionally, the Securities and Exchange Commission has been quick to mete out harsh punishments to companies found guilty of both domestic and international bribery, with tech giant Siemens AG being forced to pay fines totalling $450 million when found guilty of offences under the Foreign Corrupt Practices Act at the end of last year. With a possible legal burden that heavy, could Larry Ellison be regretting his company's latest acquisition?
Should Sun be fined under US law for actions that occurred outside its borders, or is it what the companies deserves for stooping as low as bribery to get things done? Share your thoughts over in the forums.
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