Feeds

Sun: 'We may have violated bribery laws'

The Foreign Corrupt Practices Act

Providing a secure and efficient Helpdesk

Sun Microsystems, which is in the middle of a $5.6bn acquisition by software giant Oracle, said in its 10-Q quarterly financial filing with the Securities and Exchange Commission that it may have broken bribery laws overseas. The 10-Q filing also put some numbers on what Sun will have to pay if the Oracle acquisition does not go through.

Sun was pretty vague in the filing about exactly what was going on and where, but it said in the legal proceedings section (which appears in all 10-Q and 10-K reports for major companies because they are usually suing or being sued) that during fiscal year 2009 (which ends this June) it "identified activities in a certain foreign country that may have violated the Foreign Corrupt Practices Act."

You can learn all you want about the FCPA here at the DoJ site set up specifically for it. But in short, the FCPA was passed in 1977 after more than 400 companies admitted to shelling out more than $300m in bribes to foreign government officials, politicians, and political parties in the mid-1970s. The law was updated in 1988 and again in 1998, and it basically says you can't bribe foreign officials as a way of keeping business. The DoJ is the enforcer of the law and works hand-in-hand with the SEC to investigate allegations of bribery.

"We recently made a voluntary disclosure with respect to this and other matters to the Department of Justice (DOJ), Securities and Exchange Commission (SEC) and the applicable governmental agencies in certain foreign countries regarding the results of our investigations to date," Sun wrote in the 10-Q filing. "We are cooperating with the DOJ and SEC in connection with their review of these matters and the outcome of these, or any future matters, cannot be predicted. The FCPA and related statutes and regulations provide for potential monetary penalties, criminal sanctions and in some cases debarment from doing business with the U.S. federal government in connection with FCPA violations, any of which could have a material effect on our business."

According to a report at Reuters, Oracle was privy to the information about the bribery allegations and the subsequent investigation prior to making its bid to acquire Sun on April 20. The Wall Street Journal also has an Oracle spokesperson saying the company knew about the issue.

Sun's filing also touches on the merger agreement announced on April 20, where Oracle agreed to shell out $9.50 per share to acquire Sun (the document calls it a merger, but get real). If the deal doesn't go through, the filing said, Sun might be liable to pay a termination fee of approximately $260m and, in certain circumstances, might be responsible for covering Oracle's out-of-pocket expenses relating to the merger agreements up to an additional $45m. ®

Providing a secure and efficient Helpdesk

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Special pleading against mass surveillance won't help anyone
Protecting journalists alone won't protect their sources
Big Content Australia just blew a big hole in its credibility
AHEDA's research on average content prices did not expose methodology, so appears less than rigourous
Vodafone to buy 140 Phones 4u stores from stricken retailer
887 jobs 'preserved' in the process, says administrator PwC
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.