Feeds

Sun: 'We may have violated bribery laws'

The Foreign Corrupt Practices Act

High performance access to file storage

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. ®

High performance access to file storage

More from The Register

next story
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Did a date calculation bug just cost hard-up Co-op Bank £110m?
And just when Brit banking org needs £400m to stay afloat
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
It may be ILLEGAL to run Heartbleed health checks – IT lawyer
Do the right thing, earn up to 10 years in clink
France bans managers from contacting workers outside business hours
«Email? Mais non ... il est plus tard que six heures du soir!»
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
HP ArcSight ESM solution helps Finansbank
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.