In re ORACLE CORPORATION

 
 
 UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 95913 / September 27, 2022 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-21158 
 
 
In the Matter of 
 
ORACLE CORPORATION 
 
Respondent. 
 
 
ORDER INSTITUTING CEASE-AND-
DESIST PROCEEDINGS, PURSUANT TO 
SECTION 21C OF THE SECURITIES 
EXCHANGE ACT OF 1934, MAKING 
FINDINGS, AND IMPOSING A CEASE-
AND-DESIST ORDER  
   
 
I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-
and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities 
Exchange Act of 1934 (“Exchange Act”), against Oracle Corporation (“Respondent”).   
 
II. 
 
 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 
purpose of these proceedings and any other proceedings brought by or on behalf of the 
Commission, or to which the Commission is a party, and without admitting or denying the findings 
herein, except as to the Commission’s jurisdiction over it and the subject matter of these 
proceedings, which are admitted, Respondent consents to the entry of this Order Instituting Cease 
and-Desist Proceedings, Pursuant to Section 21C of the Securities Exchange Act of 1934, Making 
Findings, and Imposing a Cease-and-Desist Order (“Order”), as set forth below. 
 

 
 
III. 
 
 On the basis of this Order and Respondent’s Offer, the Commission finds
1
 that:  
 
SUMMARY 
1. This matter concerns violations of the anti-bribery, books and records, and 
internal accounting controls provisions of the Foreign Corrupt Practices Act (“FCPA”) by 
Oracle Corporation (“Oracle”), a Texas headquartered technology company, resulting from 
conduct undertaken by agents and employees of certain of its subsidiaries.  From at least 
2014 through 2019 (the “Relevant Period”), employees of Oracle subsidiaries based in 
India, Turkey, and the United Arab Emirates (collectively, the “Subsidiaries”) used discount 
schemes and sham marketing reimbursement payments to finance slush funds held at 
Oracle’s channel partners in those markets.  The slush funds were used both to (i) bribe 
foreign officials, and/or (ii) provide other benefits such as paying for foreign officials to 
attend technology conferences around the world in violation of Oracle’s internal policies. 
RESPONDENT 
2. Oracle Corporation is a multinational information technology company 
headquartered in Austin, Texas.  Oracle’s common stock is registered with the Commission 
pursuant to Section 12(b) of the Exchange Act and trades on the New York Stock Exchange 
under the Ticker “ORCL.”  Oracle employs a global workforce to service its international 
customers that include businesses of all sizes, government agencies, and educational 
institutions.  On August 16, 2012, Oracle agreed to pay a $2 million penalty to settle the 
SEC’s allegations that Oracle violated the books and records and internal accounting 
controls provisions of the FCPA by failing to prevent Oracle India Private Limited (“Oracle 
India”) from keeping unauthorized side funds at distributors from 2005 to 2007. 
FACTS 
Background 
3. During the Relevant Period, Oracle exercised control over its subsidiaries.  
Oracle’s legal, audit, and compliance functions were centrally coordinated from its U.S. 
headquarters within the United States and implemented on a regional basis.  Additionally, 
Oracle consolidated the Subsidiaries’ financial statements into Oracle’s financial 
statements.  
4. The employees of Oracle’s subsidiaries reported up to the parent company 
through lines of business (“LOB”).  LOB heads set the financial and business targets for 
                                                
1
  The findings herein are made pursuant to Respondent’s Offer of Settlement and are not 
binding on any other person or entity in this or any other proceeding.  
 

 
 
their respective LOB by region or territory, not by country or subsidiary.  Consistent with 
the LOB structure, certain employees in Oracle’s organization moved between Oracle 
subsidiaries to perform different roles or even while performing the same role. 
5. During the Relevant Period, Oracle used both a direct and indirect sales 
model.  Under the direct model, Oracle transacted directly with customers, and the 
customers paid Oracle directly.  Under the indirect method, Oracle transacted through 
various types of distributors, including value added distributors (“VADs”) and value added 
resellers (“VARs”).  Oracle utilized a global on-boarding and due diligence process for 
these channel partners that Oracle implemented at the regional and country levels.  Oracle 
only permitted its subsidiaries to work with VADs or VARs who were accepted to its 
Oracle Partner Network (“OPN”).  Similarly, Oracle prohibited its subsidiaries from 
conducting business with companies removed from the OPN. 
6. While Oracle used the indirect sales model for a variety of legitimate 
business reasons, such as local law requirements or to satisfy payment terms, it recognized 
since at least 2012 that the indirect model also presented certain risks of abuse – including 
the creation of improper slush funds. 
 Improper Use of Discounts  
7. According to Oracle’s policies, an employee was only supposed to request a 
discount from a product’s list price for a legitimate business reason.  Oracle used a three-tier 
system for approving discount requests above designated amounts, depending on the 
product.  Depending on the amount of the discount, Oracle at times required subsidiary 
employees to obtain approval from an approver in a subsidiary other than that of the 
employee seeking the discount.  For the highest level of discounts, Oracle required the 
subsidiary employee to obtain approval from an Oracle headquarters designated approver.  
Typical discount justifications referred to budgetary caps at end customers or competition 
from other original equipment manufacturers.  However, while Oracle policy mandated that 
all discount requests be supported by accurate information and Oracle reviewers could 
request documentary support, Oracle policy did not require documentary support for the 
requested discounts – even at the highest level.   
8. As a result, Oracle Subsidiary employees were able to implement a scheme 
whereby larger discounts than required for legitimate business reasons were used in order to 
create slush funds with complicit VADs or VARs.  The channel partners profited from the 
scheme by keeping a portion of the excess deal margin. 
 Improper Use of Marketing Reimbursements 
9. During the Relevant Period, Oracle allowed its sales employees at the 
Subsidiaries to request purchase orders meant to reimburse VADs and VARs for certain 
expenses associated with marketing Oracle’s products.  As long as the purchase orders were 
under $5,000, first-level supervisors at the Subsidiaries could approve the purchase order 

 
 
requests without any corroborating documentation indicating that the marketing activity 
actually took place.  For example, Oracle Turkey sales employees opened purchase orders 
totaling approximately $115,200 to VADs and VARs in 2018 that were ostensibly for 
marketing purposes and were individually under this $5,000 threshold. 
10. Oracle subsidiary employees based in Turkey and the United Arab Emirates 
requested sham marketing reimbursements to VADs and VARs as a way to increase the 
amount of money available in the slush funds held at certain channel partners.  The direct 
supervisors of these sales employees, who were complicit in the scheme, approved the 
fraudulent requests. 
 Improper Conduct at Turkish Subsidiary - Oracle Bilgisayer Sistemleri 
 Limited Sirketi (“Oracle Turkey”) 
 The VAD Accounts 
11. From 2009 – 2019, Oracle Turkey used both excessive discounts and sham 
marketing reimbursement payments to create off-book slush funds at its two VADs.  
Internally, Oracle Turkey sales employees referred to the accounts as “havuz,” which means 
“pool” or “kumbara,” which means “moneybox,” and used the accounts for purposes that 
were prohibited under Oracle’s internal policies.  Oracle Turkey employees routinely used 
the slush funds to pay for the travel and accommodation expenses of end-user customers, 
including foreign officials, to attend annual technology conferences in Turkey and the 
United States, including Oracle’s own annual technology conference.  In some instances, 
these funds were also used to pay for the travel and accommodation expenses of foreign 
officials’ spouses and children, as well as for side trips to Los Angeles and Napa Valley.  
12. Oracle Turkey employees used these slush funds for roughly a decade.  
Oracle Turkey’s management, including the country leader, knew of and condoned the 
practice.  Given how these schemes were implemented, Oracle lacks records regarding the 
full size and scope of how these off-book slush funds were used.  
The 112 Project 
13. In May 2018, Oracle Turkey was attempting to win a lucrative contract with 
Turkey’s Ministry of Interior (“MOI”) related to the ongoing creation of an emergency call 
system for Turkish citizens (“112 Project”), for which Oracle Turkey had previously 
provided services.  The sales account manager for the MOI (“Turkey Sales 
Representative”), with the knowledge of the then-country leader, sought to improperly 
influence relevant officials and planned a week-long trip to California for four MOI 
officials that was likely paid for with funds from a VAD account.  Ostensibly, the purpose 
of the trip was for the MOI officials to attend a meeting at Oracle’s headquarters in 
California with a senior Oracle executive.  But the meeting at Oracle’s headquarters only 
lasted approximately fifteen to twenty minutes.  During the rest of the week, the Turkey 
Sales Representative entertained the MOI officials in Los Angeles and Napa Valley and 

 
 
took them to a theme park.  On May 31, 2018, Oracle received a large follow-on order 
related to the 112 Project.   
14. In order to fund the MOI officials’ leisure trip, the Turkey Sales 
Representative needed to request a non-standard discount.  Accordingly, the Turkey Sales 
Representative requested an excessive discount for the 112 Project by claiming the MOI 
had budgetary restraints and that Oracle Turkey was facing stiff competition from other 
original equipment manufacturers.  Oracle headquarters personnel in the United States 
relied on the Turkey Sales Representative’s claim of competition when it approved the 
discount, but they did not require proof.  In reality, the MOI did not conduct a competitive 
bidding process for this contract.  Instead, the MOI required any bidders that responded to 
the tender offer to include Oracle products in their bid. 
The SSI Deals 
15. The same Turkey Sales Representative involved with the 112 Project also 
directed cash bribes to officials at Turkey’s Social Security Institute (“SSI”).  According to 
a spreadsheet the Turkey Sales Representative maintained, the Turkey Sales Representative 
was tracking how much potential margin he could create from a discount request six months 
before he finalized a deal with the SSI in 2016.  Then, three months before he closed the 
deal, the Turkey Sales Representative met with an intermediary for the SSI officials 
(“Intermediary”).  The subject of the calendar entry for the meeting read, “Those who think 
big are meeting up.” 
16. In order to fund the bribes in connection with the 2016 SSI deal, the Turkey 
Sales Representative again falsely claimed he needed a significant discount due to intense 
competition from other original equipment manufacturers.  An Oracle employee located in 
the U.S. approved the discount due to the deal’s size.  As before, no additional documentary 
support for the justification was required.  However, instead of intense competition, 
Turkey’s public procurement records that were available at the time indicated that the SSI 
required Oracle products to fulfill the tender, which precluded competition from other 
original equipment manufacturers.  The Turkey Sales Representative used the excess 
margin to increase the amount of money kept in a slush fund maintained by the VAD for 
the deal. 
17. In 2017, the same Turkey Sales Representative used a VAR to create a slush 
fund for SSI officials related to a database infrastructure order (“Turkey VAR”).  As with 
the other examples, a significant discount was approved by Oracle headquarters personnel 
in the United States without documentary support.  A spreadsheet maintained by the Turkey 
Sales Representative shows an excessive margin of approximately $1.1 million, only a 
portion of which was used to purchase legitimate products such as software licenses.  
18. The Turkey VAR only kept a nominal amount for itself and while following 
instructions from the Turkey Sales Representative, the Turkey VAR passed the majority of 
the funds to other entities, including an entity controlled by the Intermediary.  The 

 
 
Intermediary-controlled entity that was responsible for providing the cash bribes to SSI 
officials received at least $185,605. 
 Improper Conduct at UAE Subsidiary - Oracle Systems Limited 
 (“Oracle UAE”) 
  The VAR “Wallets” 
19. From at least 2014 to 2019, certain Oracle UAE sales employees used both 
excessive discounts and marketing reimbursement payments to maintain slush funds at 
VARs.  In some instances, the sales people referred to slush funds that they maintained over 
a period of time at a specific VAR as a “wallet.”  Oracle UAE sales employees directed the 
VARs how to spend the funds, and used the wallets to pay for the travel and 
accommodation expenses of end customers, including foreign officials, to attend Oracle’s 
annual technology conference in violation of Oracle’s internal policies.   
The Corrupt UAE Deals 
20. In 2018 and 2019, an Oracle UAE sales account manager (“UAE Sales 
Representative”) for a UAE state-owned entity (“SOE”) paid approximately $130,000 in 
bribes to the SOE’s Chief Technology Officer in return for six different contracts over the 
same period.  The first three bribes were funded with the assistance of two complicit VARs 
through an excessive discount and paid through another entity (“UAE Entity”) that was not 
an Oracle approved VAR for public sector transactions and whose sole purpose was to 
make the bribe payments.  For the final three deals, the UAE Entity was the actual entity 
that contracted with the UAE SOE despite the fact that Oracle’s deal documents represented 
an Oracle approved partner as the VAR for the deal.   
Improper Conduct at Oracle India 
21. In 2019, Oracle India sales employees also used an excessive discount 
scheme in connection with a transaction with a transportation company, a majority of which 
was owned by the Indian Ministry of Railways (“Indian SOE”).  In January 2019, the sales 
employees working on the deal, citing intense competition from other original equipment 
manufacturers, claimed the deal would be lost without a 70% discount on the software 
component of the deal.  Due to the size of the discount, Oracle required an employee based 
in France to approve the request.  The Oracle designee provided approval for the discount 
without requiring the sales employee to provide further documentary support for the 
request.  In fact, the Indian SOE’s publicly available procurement website indicated that 
Oracle India faced no competition because it had mandated the use of Oracle products for 
the project.  One of the sales employees involved in the transaction maintained a 
spreadsheet that indicated $67,000 was the “buffer” available to potentially make payments 
to a specific Indian SOE official.  A total of approximately $330,000 was funneled to an 
entity with a reputation for paying SOE officials and another $62,000 was paid to an entity 

 
 
controlled by the sales employees responsible for the transaction. 
LEGAL STANDARDS AND FCPA VIOLATIONS 
22. Under Section 21C(a) of the Exchange Act, the Commission may impose a 
cease-and-desist order upon any person who is violating, has violated, or is about to violate any 
provision of the Exchange Act or any rule or regulation thereunder, and upon any other person 
that is, was, or would be a cause of the violation, due to an act or omission the person knew or 
should have known would contribute to such violation. 
23. As a result of the conduct described above, Respondent violated Section 30A of 
the Exchange Act, which prohibits any issuer with a class of securities registered pursuant to 
Section 12 of the Exchange Act, or any officer, director, employee, or agent acting on behalf of 
such issuer, or any stockholder acting on behalf of an issuer, to make use of the mails or any 
means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, 
promise to pay, or authorization of the payment of any money, or offer, gift or promise to give 
anything of value to any foreign official for purposes of influencing any act or decision of such 
foreign official in his official capacity in order to assist such issuer in obtaining or retaining 
business for or with any person. 
24. As a result of the conduct described above, Respondent violated Section 
13(b)(2)(A) of the Exchange Act, which requires every issuer with a class of securities 
registered pursuant to Section 12 of the Exchange Act to make and keep books, records, and 
accounts, which, in reasonable detail, accurately and fairly reflect the transactions and 
dispositions of the assets of the issuer.  
25. As a result of the conduct described above, Respondent violated Section 
13(b)(2)(B) of the Exchange Act, which requires issuers with a class of securities registered 
pursuant to Section 12 of the Exchange Act and issuers with reporting obligations pursuant to 
Section 15(d) of the Exchange Act to devise and maintain a system of internal accounting 
controls sufficient to provide reasonable assurances that (i) transactions are executed in 
accordance with management’s general or specific authorization; (ii) transactions are recorded 
as necessary (I) to permit preparation of financial statements in conformity with generally 
accepted accounting principles or any other criteria applicable to such statements, and (II) to 
maintain accountability for assets; (iii) access to assets is permitted only in accordance with 
management’s general or specific authorization; and (iv) the recorded accountability for assets 
is compared with the existing assets at reasonable intervals and appropriate action is taken with 
respect to any differences. 
Commission Consideration of Oracle’s Cooperation and Remedial Efforts 
26. In determining to accept the Offer, the Commission considered that Oracle self-
reported certain unrelated conduct, remedial acts it undertook, and cooperation afforded the 
Commission Staff. 

 
 
27. Oracle’s cooperation included sharing facts developed in the course of its own 
internal investigations, voluntarily providing translations of key documents, and facilitating the 
staff’s requests to interview current and former employees of Oracle’s foreign subsidiaries.  
28. Oracle’s remediation includes: (i) terminating senior regional managers and 
other employees involved in the misconduct and separating from employees with supervisory 
responsibilities over the misconduct; (ii) terminating distributors and resellers involved in the 
misconduct; (iii) strengthening and expanding its global compliance, risk, and control functions, 
including the creation of over 15 new positions and teams at headquarters and globally; (iv) 
improving aspects of its discount approval process and increasing transparency in the product 
discounting process through the implementation and expansion of transactional controls; (v) 
increasing oversight of, and controls on, the purchase requisition approval process; (vi) limiting 
financial incentives and business courtesies available to third parties, particularly in public 
sector transactions; (vii) improving its customer registration and payment checking processes 
and making other enhancements in connection with annual technology conferences; (viii) 
enhancing its proactive audit functions; (ix) introducing measures to improve the level of 
expertise and quality of its partner network and reducing substantially the number of partners 
within its network; (x) enhancing the procedures for engaging third parties, including the due 
diligence processes to which partners are subjected; (xi) implementing a compliance data 
analytics program; and (xii) enhancing training and communications provided to employees and 
third parties regarding anti-corruption, internal controls, and other compliance issues. 
DISGORGEMENT AND CIVIL PENALTIES  
29. The disgorgement and prejudgment interest ordered in section IV. is consistent 
with equitable principles, does not exceed Respondent’s net profits from its violations, and 
allowing Respondent to retain such funds would be inconsistent with equitable principles.  
Therefore, in these circumstances, distributing disgorged funds to the U.S. Treasury is the most 
equitable alternative.  The disgorgement and prejudgment interest ordered in section IV. shall be 
transferred to the general fund of the U.S. Treasury, subject to Section 21F(g)(3) of the 
Exchange Act.  
IV. 
In  view of the foregoing, the Commission deems it appropriate to impose the sanctions 
agreed to in Respondent’s Offer. 
Accordingly, pursuant to Section 21C of the Exchange Act it is hereby ORDERED that: 
A. Respondent shall cease and desist from committing or causing any 
violations and any future violations of Sections 30A, 13(b)(2)(A) and 
13(b)(2)(B) of the Exchange Act [15 U.S.C. §§ 78m(b)(2)(A), 
78m(b)(2)(B), and 78dd-1]. 
B. Respondent shall, within 14 days of entry of this Order, pay disgorgement 

 
 
of $7,114,376.44 and prejudgment interest of $791,040.20 for a total of 
$7,905,416.64 and a civil money penalty in the amount of $15,000,000 to 
the Securities and Exchange Commission for transfer to the general fund 
of the United States Treasury, subject to Exchange Act Section 21F(g)(3).  
If timely payment is not made, additional interest shall accrue pursuant to 
SEC Rule of Practice 600 and 31 U.S.C 3717. 
C. Payment must be made in one of the following ways: 
(1) Respondent may transmit payment electronically to the 
Commission, which will provide detailed ACH 
transfer/Fedwire instructions upon request; 
(2) Respondent may make direct payment from a bank account 
via Pay.gov through the SEC Web site at 
http://www.sec.gov/about/offices/ofm.htm; or 
(3) Respondent may pay by certified check, bank cashier’s 
check, or United States postal money order, made payable 
to the Securities and Exchange Commission and hand-
delivered or mailed to: 
    Enterprise Services Center   
    Accounts Receivable Branch   
    HQ Bldg., Room 181, AMZ- 341 
    6500 South MacArthur Boulevard Oklahoma City, OK 73169 
  

 
 
 
 Payments by check or money order must be accompanied by a  cover letter 
identifying Oracle as the Respondent in these proceedings, and the file number of these 
proceedings; a copy of the cover letter and check or money order must be sent to Charles 
Cain,  Unit  Chief,  FCPA  Unit,  Division of Enforcement, Securities  and Exchange 
Commission, 100 F St., NE, Washington, DC 20549. 
D. Amounts ordered to be paid as civil money penalties pursuant to this 
Order shall be treated as penalties paid to the government for all purposes, 
including all tax purposes. To preserve the deterrent effect of the civil 
penalty, Respondent agrees that in any Related Investor Action, it shall not 
argue that it is entitled to, nor shall it benefit by, offset or reduction of any 
award of compensatory damages by the amount of any part of 
Respondent’s payment of a civil penalty in this action (“Penalty Offset”). 
If the court in any Related Investor Action grants such a Penalty Offset, 
Respondent agrees that it shall, within 30 days after entry of a final order 
granting the Penalty Offset, notify the Commission’s counsel in this action 
and pay the amount of the Penalty Offset to the Securities and Exchange 
Commission. Such a payment shall not be deemed an additional civil 
penalty and shall not be deemed to change the amount of the civil penalty 
imposed in this proceeding. For purposes of this paragraph, a “Related 
Investor Action” means a private damages action brought against 
Respondent by or on behalf of one or more investors based on 
substantially the same facts as alleged in the Order instituted by the 
Commission in this proceeding. 
 
 By the Commission. 
 
 
 
Vanessa A. Countryman 
       Secretary 
 
 
 

UNITED STATES OF AMERICA 

 Before the 

 SECURITIES AND EXCHANGE COMMISSION 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 95913 / September 27, 2022 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-21158 

 

 

In the Matter of 

 

ORACLE CORPORATION 

 

Respondent. 

 

 

ORDER INSTITUTING CEASE-AND-

DESIST PROCEEDINGS, PURSUANT TO 

SECTION 21C OF THE SECURITIES 

EXCHANGE ACT OF 1934, MAKING 

FINDINGS, AND IMPOSING A CEASE-

AND-DESIST ORDER  

   

 

I. 
 

 The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-

and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities 

Exchange Act of 1934 (“Exchange Act”), against Oracle Corporation (“Respondent”).   

 

II. 
 

 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 

purpose of these proceedings and any other proceedings brought by or on behalf of the 

Commission, or to which the Commission is a party, and without admitting or denying the findings 

herein, except as to the Commission’s jurisdiction over it and the subject matter of these 

proceedings, which are admitted, Respondent consents to the entry of this Order Instituting Cease 

and-Desist Proceedings, Pursuant to Section 21C of the Securities Exchange Act of 1934, Making 

Findings, and Imposing a Cease-and-Desist Order (“Order”), as set forth below. 

 



 

 

III. 

 

 On the basis of this Order and Respondent’s Offer, the Commission finds1 that:  

 

SUMMARY 

1. This matter concerns violations of the anti-bribery, books and records, and 

internal accounting controls provisions of the Foreign Corrupt Practices Act (“FCPA”) by 

Oracle Corporation (“Oracle”), a Texas headquartered technology company, resulting from 

conduct undertaken by agents and employees of certain of its subsidiaries.  From at least 

2014 through 2019 (the “Relevant Period”), employees of Oracle subsidiaries based in 

India, Turkey, and the United Arab Emirates (collectively, the “Subsidiaries”) used discount 

schemes and sham marketing reimbursement payments to finance slush funds held at 

Oracle’s channel partners in those markets.  The slush funds were used both to (i) bribe 

foreign officials, and/or (ii) provide other benefits such as paying for foreign officials to 

attend technology conferences around the world in violation of Oracle’s internal policies. 

RESPONDENT 

2. Oracle Corporation is a multinational information technology company 

headquartered in Austin, Texas.  Oracle’s common stock is registered with the Commission 

pursuant to Section 12(b) of the Exchange Act and trades on the New York Stock Exchange 

under the Ticker “ORCL.”  Oracle employs a global workforce to service its international 

customers that include businesses of all sizes, government agencies, and educational 

institutions.  On August 16, 2012, Oracle agreed to pay a $2 million penalty to settle the 

SEC’s allegations that Oracle violated the books and records and internal accounting 

controls provisions of the FCPA by failing to prevent Oracle India Private Limited (“Oracle 

India”) from keeping unauthorized side funds at distributors from 2005 to 2007. 

FACTS 

Background 

3. During the Relevant Period, Oracle exercised control over its subsidiaries.  

Oracle’s legal, audit, and compliance functions were centrally coordinated from its U.S. 

headquarters within the United States and implemented on a regional basis.  Additionally, 

Oracle consolidated the Subsidiaries’ financial statements into Oracle’s financial 

statements.  

4. The employees of Oracle’s subsidiaries reported up to the parent company 

through lines of business (“LOB”).  LOB heads set the financial and business targets for 

                                                
1  The findings herein are made pursuant to Respondent’s Offer of Settlement and are not 

binding on any other person or entity in this or any other proceeding.  

 



 

 

their respective LOB by region or territory, not by country or subsidiary.  Consistent with 

the LOB structure, certain employees in Oracle’s organization moved between Oracle 

subsidiaries to perform different roles or even while performing the same role. 

5. During the Relevant Period, Oracle used both a direct and indirect sales 

model.  Under the direct model, Oracle transacted directly with customers, and the 

customers paid Oracle directly.  Under the indirect method, Oracle transacted through 

various types of distributors, including value added distributors (“VADs”) and value added 

resellers (“VARs”).  Oracle utilized a global on-boarding and due diligence process for 

these channel partners that Oracle implemented at the regional and country levels.  Oracle 

only permitted its subsidiaries to work with VADs or VARs who were accepted to its 

Oracle Partner Network (“OPN”).  Similarly, Oracle prohibited its subsidiaries from 

conducting business with companies removed from the OPN. 

6. While Oracle used the indirect sales model for a variety of legitimate 

business reasons, such as local law requirements or to satisfy payment terms, it recognized 

since at least 2012 that the indirect model also presented certain risks of abuse – including 

the creation of improper slush funds. 

 Improper Use of Discounts  

7. According to Oracle’s policies, an employee was only supposed to request a 

discount from a product’s list price for a legitimate business reason.  Oracle used a three-tier 

system for approving discount requests above designated amounts, depending on the 

product.  Depending on the amount of the discount, Oracle at times required subsidiary 

employees to obtain approval from an approver in a subsidiary other than that of the 

employee seeking the discount.  For the highest level of discounts, Oracle required the 

subsidiary employee to obtain approval from an Oracle headquarters designated approver.  

Typical discount justifications referred to budgetary caps at end customers or competition 

from other original equipment manufacturers.  However, while Oracle policy mandated that 

all discount requests be supported by accurate information and Oracle reviewers could 

request documentary support, Oracle policy did not require documentary support for the 

requested discounts – even at the highest level.   

8. As a result, Oracle Subsidiary employees were able to implement a scheme 

whereby larger discounts than required for legitimate business reasons were used in order to 

create slush funds with complicit VADs or VARs.  The channel partners profited from the 

scheme by keeping a portion of the excess deal margin. 

 Improper Use of Marketing Reimbursements 

9. During the Relevant Period, Oracle allowed its sales employees at the 

Subsidiaries to request purchase orders meant to reimburse VADs and VARs for certain 

expenses associated with marketing Oracle’s products.  As long as the purchase orders were 

under $5,000, first-level supervisors at the Subsidiaries could approve the purchase order 



 

 

requests without any corroborating documentation indicating that the marketing activity 

actually took place.  For example, Oracle Turkey sales employees opened purchase orders 

totaling approximately $115,200 to VADs and VARs in 2018 that were ostensibly for 

marketing purposes and were individually under this $5,000 threshold. 

10. Oracle subsidiary employees based in Turkey and the United Arab Emirates 

requested sham marketing reimbursements to VADs and VARs as a way to increase the 

amount of money available in the slush funds held at certain channel partners.  The direct 

supervisors of these sales employees, who were complicit in the scheme, approved the 

fraudulent requests. 

 Improper Conduct at Turkish Subsidiary - Oracle Bilgisayer Sistemleri 

 Limited Sirketi (“Oracle Turkey”) 

 The VAD Accounts 

11. From 2009 – 2019, Oracle Turkey used both excessive discounts and sham 

marketing reimbursement payments to create off-book slush funds at its two VADs.  

Internally, Oracle Turkey sales employees referred to the accounts as “havuz,” which means 

“pool” or “kumbara,” which means “moneybox,” and used the accounts for purposes that 

were prohibited under Oracle’s internal policies.  Oracle Turkey employees routinely used 

the slush funds to pay for the travel and accommodation expenses of end-user customers, 

including foreign officials, to attend annual technology conferences in Turkey and the 

United States, including Oracle’s own annual technology conference.  In some instances, 

these funds were also used to pay for the travel and accommodation expenses of foreign 

officials’ spouses and children, as well as for side trips to Los Angeles and Napa Valley.  

12. Oracle Turkey employees used these slush funds for roughly a decade.  

Oracle Turkey’s management, including the country leader, knew of and condoned the 

practice.  Given how these schemes were implemented, Oracle lacks records regarding the 

full size and scope of how these off-book slush funds were used.  

The 112 Project 

13. In May 2018, Oracle Turkey was attempting to win a lucrative contract with 

Turkey’s Ministry of Interior (“MOI”) related to the ongoing creation of an emergency call 

system for Turkish citizens (“112 Project”), for which Oracle Turkey had previously 

provided services.  The sales account manager for the MOI (“Turkey Sales 

Representative”), with the knowledge of the then-country leader, sought to improperly 

influence relevant officials and planned a week-long trip to California for four MOI 

officials that was likely paid for with funds from a VAD account.  Ostensibly, the purpose 

of the trip was for the MOI officials to attend a meeting at Oracle’s headquarters in 

California with a senior Oracle executive.  But the meeting at Oracle’s headquarters only 

lasted approximately fifteen to twenty minutes.  During the rest of the week, the Turkey 

Sales Representative entertained the MOI officials in Los Angeles and Napa Valley and 



 

 

took them to a theme park.  On May 31, 2018, Oracle received a large follow-on order 

related to the 112 Project.   

14. In order to fund the MOI officials’ leisure trip, the Turkey Sales 

Representative needed to request a non-standard discount.  Accordingly, the Turkey Sales 

Representative requested an excessive discount for the 112 Project by claiming the MOI 

had budgetary restraints and that Oracle Turkey was facing stiff competition from other 

original equipment manufacturers.  Oracle headquarters personnel in the United States 

relied on the Turkey Sales Representative’s claim of competition when it approved the 

discount, but they did not require proof.  In reality, the MOI did not conduct a competitive 

bidding process for this contract.  Instead, the MOI required any bidders that responded to 

the tender offer to include Oracle products in their bid. 

The SSI Deals 

15. The same Turkey Sales Representative involved with the 112 Project also 

directed cash bribes to officials at Turkey’s Social Security Institute (“SSI”).  According to 

a spreadsheet the Turkey Sales Representative maintained, the Turkey Sales Representative 

was tracking how much potential margin he could create from a discount request six months 

before he finalized a deal with the SSI in 2016.  Then, three months before he closed the 

deal, the Turkey Sales Representative met with an intermediary for the SSI officials 

(“Intermediary”).  The subject of the calendar entry for the meeting read, “Those who think 

big are meeting up.” 

16. In order to fund the bribes in connection with the 2016 SSI deal, the Turkey 

Sales Representative again falsely claimed he needed a significant discount due to intense 

competition from other original equipment manufacturers.  An Oracle employee located in 

the U.S. approved the discount due to the deal’s size.  As before, no additional documentary 

support for the justification was required.  However, instead of intense competition, 

Turkey’s public procurement records that were available at the time indicated that the SSI 

required Oracle products to fulfill the tender, which precluded competition from other 

original equipment manufacturers.  The Turkey Sales Representative used the excess 

margin to increase the amount of money kept in a slush fund maintained by the VAD for 

the deal. 

17. In 2017, the same Turkey Sales Representative used a VAR to create a slush 

fund for SSI officials related to a database infrastructure order (“Turkey VAR”).  As with 

the other examples, a significant discount was approved by Oracle headquarters personnel 

in the United States without documentary support.  A spreadsheet maintained by the Turkey 

Sales Representative shows an excessive margin of approximately $1.1 million, only a 

portion of which was used to purchase legitimate products such as software licenses.  

18. The Turkey VAR only kept a nominal amount for itself and while following 

instructions from the Turkey Sales Representative, the Turkey VAR passed the majority of 

the funds to other entities, including an entity controlled by the Intermediary.  The 



 

 

Intermediary-controlled entity that was responsible for providing the cash bribes to SSI 

officials received at least $185,605. 

 Improper Conduct at UAE Subsidiary - Oracle Systems Limited 

 (“Oracle UAE”) 

  The VAR “Wallets” 

19. From at least 2014 to 2019, certain Oracle UAE sales employees used both 

excessive discounts and marketing reimbursement payments to maintain slush funds at 

VARs.  In some instances, the sales people referred to slush funds that they maintained over 

a period of time at a specific VAR as a “wallet.”  Oracle UAE sales employees directed the 

VARs how to spend the funds, and used the wallets to pay for the travel and 

accommodation expenses of end customers, including foreign officials, to attend Oracle’s 

annual technology conference in violation of Oracle’s internal policies.   

The Corrupt UAE Deals 

20. In 2018 and 2019, an Oracle UAE sales account manager (“UAE Sales 

Representative”) for a UAE state-owned entity (“SOE”) paid approximately $130,000 in 

bribes to the SOE’s Chief Technology Officer in return for six different contracts over the 

same period.  The first three bribes were funded with the assistance of two complicit VARs 

through an excessive discount and paid through another entity (“UAE Entity”) that was not 

an Oracle approved VAR for public sector transactions and whose sole purpose was to 

make the bribe payments.  For the final three deals, the UAE Entity was the actual entity 

that contracted with the UAE SOE despite the fact that Oracle’s deal documents represented 

an Oracle approved partner as the VAR for the deal.   

Improper Conduct at Oracle India 

21. In 2019, Oracle India sales employees also used an excessive discount 

scheme in connection with a transaction with a transportation company, a majority of which 

was owned by the Indian Ministry of Railways (“Indian SOE”).  In January 2019, the sales 

employees working on the deal, citing intense competition from other original equipment 

manufacturers, claimed the deal would be lost without a 70% discount on the software 

component of the deal.  Due to the size of the discount, Oracle required an employee based 

in France to approve the request.  The Oracle designee provided approval for the discount 

without requiring the sales employee to provide further documentary support for the 

request.  In fact, the Indian SOE’s publicly available procurement website indicated that 

Oracle India faced no competition because it had mandated the use of Oracle products for 

the project.  One of the sales employees involved in the transaction maintained a 

spreadsheet that indicated $67,000 was the “buffer” available to potentially make payments 

to a specific Indian SOE official.  A total of approximately $330,000 was funneled to an 

entity with a reputation for paying SOE officials and another $62,000 was paid to an entity 



 

 

controlled by the sales employees responsible for the transaction. 

LEGAL STANDARDS AND FCPA VIOLATIONS 

22. Under Section 21C(a) of the Exchange Act, the Commission may impose a 

cease-and-desist order upon any person who is violating, has violated, or is about to violate any 

provision of the Exchange Act or any rule or regulation thereunder, and upon any other person 

that is, was, or would be a cause of the violation, due to an act or omission the person knew or 

should have known would contribute to such violation. 

23. As a result of the conduct described above, Respondent violated Section 30A of 

the Exchange Act, which prohibits any issuer with a class of securities registered pursuant to 

Section 12 of the Exchange Act, or any officer, director, employee, or agent acting on behalf of 

such issuer, or any stockholder acting on behalf of an issuer, to make use of the mails or any 

means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, 

promise to pay, or authorization of the payment of any money, or offer, gift or promise to give 

anything of value to any foreign official for purposes of influencing any act or decision of such 

foreign official in his official capacity in order to assist such issuer in obtaining or retaining 

business for or with any person. 

24. As a result of the conduct described above, Respondent violated Section 

13(b)(2)(A) of the Exchange Act, which requires every issuer with a class of securities 

registered pursuant to Section 12 of the Exchange Act to make and keep books, records, and 

accounts, which, in reasonable detail, accurately and fairly reflect the transactions and 

dispositions of the assets of the issuer.  

25. As a result of the conduct described above, Respondent violated Section 

13(b)(2)(B) of the Exchange Act, which requires issuers with a class of securities registered 

pursuant to Section 12 of the Exchange Act and issuers with reporting obligations pursuant to 

Section 15(d) of the Exchange Act to devise and maintain a system of internal accounting 

controls sufficient to provide reasonable assurances that (i) transactions are executed in 

accordance with management’s general or specific authorization; (ii) transactions are recorded 

as necessary (I) to permit preparation of financial statements in conformity with generally 

accepted accounting principles or any other criteria applicable to such statements, and (II) to 

maintain accountability for assets; (iii) access to assets is permitted only in accordance with 

management’s general or specific authorization; and (iv) the recorded accountability for assets 

is compared with the existing assets at reasonable intervals and appropriate action is taken with 

respect to any differences. 

Commission Consideration of Oracle’s Cooperation and Remedial Efforts 

26. In determining to accept the Offer, the Commission considered that Oracle self-

reported certain unrelated conduct, remedial acts it undertook, and cooperation afforded the 

Commission Staff. 



 

 

27. Oracle’s cooperation included sharing facts developed in the course of its own 

internal investigations, voluntarily providing translations of key documents, and facilitating the 

staff’s requests to interview current and former employees of Oracle’s foreign subsidiaries.  

28. Oracle’s remediation includes: (i) terminating senior regional managers and 

other employees involved in the misconduct and separating from employees with supervisory 

responsibilities over the misconduct; (ii) terminating distributors and resellers involved in the 

misconduct; (iii) strengthening and expanding its global compliance, risk, and control functions, 

including the creation of over 15 new positions and teams at headquarters and globally; (iv) 

improving aspects of its discount approval process and increasing transparency in the product 

discounting process through the implementation and expansion of transactional controls; (v) 

increasing oversight of, and controls on, the purchase requisition approval process; (vi) limiting 

financial incentives and business courtesies available to third parties, particularly in public 

sector transactions; (vii) improving its customer registration and payment checking processes 

and making other enhancements in connection with annual technology conferences; (viii) 

enhancing its proactive audit functions; (ix) introducing measures to improve the level of 

expertise and quality of its partner network and reducing substantially the number of partners 

within its network; (x) enhancing the procedures for engaging third parties, including the due 

diligence processes to which partners are subjected; (xi) implementing a compliance data 

analytics program; and (xii) enhancing training and communications provided to employees and 

third parties regarding anti-corruption, internal controls, and other compliance issues. 

DISGORGEMENT AND CIVIL PENALTIES  

29. The disgorgement and prejudgment interest ordered in section IV. is consistent 

with equitable principles, does not exceed Respondent’s net profits from its violations, and 

allowing Respondent to retain such funds would be inconsistent with equitable principles.  

Therefore, in these circumstances, distributing disgorged funds to the U.S. Treasury is the most 

equitable alternative.  The disgorgement and prejudgment interest ordered in section IV. shall be 

transferred to the general fund of the U.S. Treasury, subject to Section 21F(g)(3) of the 

Exchange Act.  

IV. 

In view of the foregoing, the Commission deems it appropriate to impose the sanctions 

agreed to in Respondent’s Offer. 

Accordingly, pursuant to Section 21C of the Exchange Act it is hereby ORDERED that: 

A. Respondent shall cease and desist from committing or causing any 
violations and any future violations of Sections 30A, 13(b)(2)(A) and 
13(b)(2)(B) of the Exchange Act [15 U.S.C. §§ 78m(b)(2)(A), 
78m(b)(2)(B), and 78dd-1]. 

B. Respondent shall, within 14 days of entry of this Order, pay disgorgement 



 

 

of $7,114,376.44 and prejudgment interest of $791,040.20 for a total of 
$7,905,416.64 and a civil money penalty in the amount of $15,000,000 to 
the Securities and Exchange Commission for transfer to the general fund 
of the United States Treasury, subject to Exchange Act Section 21F(g)(3).  
If timely payment is not made, additional interest shall accrue pursuant to 
SEC Rule of Practice 600 and 31 U.S.C 3717. 

C. Payment must be made in one of the following ways: 

(1) Respondent may transmit payment electronically to the 
Commission, which will provide detailed ACH 
transfer/Fedwire instructions upon request; 

(2) Respondent may make direct payment from a bank account 
via Pay.gov through the SEC Web site at 
http://www.sec.gov/about/offices/ofm.htm; or 

(3) Respondent may pay by certified check, bank cashier’s 
check, or United States postal money order, made payable 
to the Securities and Exchange Commission and hand-
delivered or mailed to: 

    Enterprise Services Center   

    Accounts Receivable Branch   

    HQ Bldg., Room 181, AMZ- 341 

    6500 South MacArthur Boulevard Oklahoma City, OK 73169 

  

http://www.sec.gov/about/offices/ofm.htm%3B
http://www.sec.gov/about/offices/ofm.htm%3B


 

 

 

 Payments by check or money order must be accompanied by a cover letter 
identifying Oracle as the Respondent in these proceedings, and the file number of these 
proceedings; a copy of the cover letter and check or money order must be sent to Charles 
Cain, Unit Chief, FCPA Unit, Division of Enforcement, Securities and Exchange 
Commission, 100 F St., NE, Washington, DC 20549. 

D. Amounts ordered to be paid as civil money penalties pursuant to this 
Order shall be treated as penalties paid to the government for all purposes, 
including all tax purposes. To preserve the deterrent effect of the civil 
penalty, Respondent agrees that in any Related Investor Action, it shall not 
argue that it is entitled to, nor shall it benefit by, offset or reduction of any 
award of compensatory damages by the amount of any part of 
Respondent’s payment of a civil penalty in this action (“Penalty Offset”). 
If the court in any Related Investor Action grants such a Penalty Offset, 
Respondent agrees that it shall, within 30 days after entry of a final order 
granting the Penalty Offset, notify the Commission’s counsel in this action 
and pay the amount of the Penalty Offset to the Securities and Exchange 
Commission. Such a payment shall not be deemed an additional civil 
penalty and shall not be deemed to change the amount of the civil penalty 
imposed in this proceeding. For purposes of this paragraph, a “Related 
Investor Action” means a private damages action brought against 
Respondent by or on behalf of one or more investors based on 
substantially the same facts as alleged in the Order instituted by the 
Commission in this proceeding. 

 

 By the Commission. 

 

 

 

Vanessa A. Countryman 

       Secretary