In re COGNIZANT TECHNOLOGY

UNITED STATES OF AMERICA 
Before the 
SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 85149 / February 15, 2019 
 
ACCOUNTING AND AUDITING ENFORCEMENT 
Release No. 4021 / February 15, 2019 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-19000 
 
 
In the Matter of 
 
 COGNIZANT TECHNOLOGY 
 SOLUTIONS 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 Cognizant Technology Solutions Corporation 
(“Cognizant” or “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. 

 
 
 
2 
 
III 
 
 On the basis of this Order and Respondent’s Offer, the Commission finds
1
 that:  
 
Summary 
 
1. These proceedings arise from violations of the antibribery, books and records, and 
internal accounting controls provisions of the Foreign Corrupt Practices Act of 1977 (the “FCPA”). 
[15 U.S.C. § 78dd].  Cognizant is a global provider of information technology and business process 
services.  Much of its business involves using technically skilled workers around the world, 
including in India, to provide such services to companies in the United States and Western Europe.  
Between 2014 and 2016 Cognizant, acting through executives in the United States and India, 
authorized contractors to pay on the company’s behalf and reimbursed them for a total of 
approximately $3.6 million in bribes to Indian government officials to obtain government 
construction-related permits and operating licenses in connection with the construction and 
operation of commercial office buildings.   
 
2. In 2014 Cognizant authorized a contractor to pay a $2 million bribe to a senior 
government official for the issuance of a planning permit for a project in Chennai, India. The 
payment, along with a scheme to conceal a $2.5 million reimbursement to the contractor, was 
authorized by two senior executives at Cognizant’s U.S. headquarters.  In 2013 and 2014, 
Cognizant’s Indian subsidiary authorized the same third party contractor to pay a bribe of 
approximately $770,000 to a government official for an environmental clearance for a project in 
Pune, India.  In 2015, the Indian subsidiary retroactively authorized and reimbursed the same third 
party contractor for approximately $870,000 in bribes that it had paid to government officials for 
construction-related permits in Siruseri, India.  Cognizant received ill-gotten gains of approximately 
$16,394,351 as a result of the conduct.     
 
3. The unlawful payments were paid from Cognizant India’s bank accounts and were 
not accurately reflected in Cognizant’s consolidated books and records.  During the relevant period 
Cognizant also failed to devise and maintain a sufficient system of internal accounting controls at its 
corporate headquarters and at Cognizant India.  This conduct took place in an environment in which 
Cognizant failed to adequately enforce  its corporate antibribery and anticorruption policies. 
 
4. As a result of its conduct Cognizant violated Exchange Act Sections 30A, 
13(b)(2)(A), and 13(b)(2)(B).  
 
Respondent 
 
5. Cognizant is a New Jersey corporation headquartered in Teaneck, N.J.  Throughout 
the relevant period its common stock was registered with the Commission under Exchange Act 
                                                 
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.   
 

 
 
 
3 
 
Section 12(b) and publicly traded on NASDAQ (symbol: CTSH).  Cognizant files annual and 
quarterly reports under Exchange Act Section 13.  Although it operates in several countries, the 
majority of Cognizant’s operations are conducted in India through Cognizant India, its largest 
subsidiary.   
Other Relevant Individuals and Entities 
 
6. Senior Executive-1 served in several senior executive positions at Cognizant in the 
United States until his resignation in 2016. 
 
7. Senior Legal Executive-1 served in Cognizant’s legal function in the United States 
until his resignation in 2016. 
 
8. Operations Officer-1 served in a senior operation role based in India until 2016. 
 
9. Real Estate Officer-1 served in Cognizant India’s corporate workplace function. 
 
10. Contracting Firm-1 is a multinational engineering and construction firm based in 
India.  It is publicly traded on exchanges in India but its securities are not registered with the 
Commission. 
 
Facts 
 
Bribe Payments in Chennai, Tamil Nadu 
 
11. Cognizant’s construction project in Chennai, referred to as the KITS campus, 
represents the company’s  largest owned facility in India, encompassing 2.7 million square feet 
with a capacity for approximately 17,500 employees.  Cognizant engaged Contracting Firm-1 to 
build the facility and obtain all necessary government permits.  Construction began in 2011 prior to 
the issuance of a required planning permit.    
12. In 2014, during the course of construction, Real Estate Officer-1 was made aware 
that an Indian government official had made a $2 million bribe demand to Contracting Firm-1 as a 
condition for issuing the planning permit.  Real Estate Officer-1 passed the information along to 
his supervisor, Operations Officer-1.  On April 21 and 22, 2014, the demand was discussed by 
video conference among Real Estate Officer-1, Operations Officer-1, Senior Executive-1, and 
Senior Legal Executive-1.  Senior Executive-1 and Senior Legal Executive-1 participated in the 
conference from the United States.  Real Estate Officer-1 described the bribe demand in detail, 
asked Senior Executive-1 and Senior Legal Executive-1 for guidance on how to proceed, and 
suggested that Contracting Firm-1 could be reimbursed for the payment through a series of sham 
change order requests to its contract.  Senior Legal Executive-1 approved the method of 
reimbursement and Senior Executive-1 authorized both the bribe payment and the suggested 
method for disguising it.  Real Estate Officer-1 was given the task of executing the scheme.  His 
direct supervisor Operations Officer-1 made no objection.   
 
13. In addition to discussing the bribe demand and the suggested method of disguising 
the reimbursement during the videoconferences, Senior Executive-1 directed his subordinates to 

 
 
 
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withhold future payments to Contracting Firm-1 if it resisted paying the bribe on Cognizant’s 
behalf.  Contracting Firm-1, which had been urging Cognizant to make the payment itself, 
ultimately yielded to Senior Executive-1’s pressure and made the payment in late May or early 
June 2014.  Cognizant received the planning permit in November of that year.   
 
14. Following Real Estate Officer-1’s suggestion, Cognizant concealed the $2.5 million 
reimbursement to Contracting Firm-1, including both the $2 million bribe and a $500,000 
commission for paying it, through a series of falsified contract change orders.  Real Estate 
Officer-1 selected change order requests from Contracting Firm-1 invoices that Cognizant had 
previously rejected and retroactively “accepted” them, adjusting the cost amounts so that they 
would total $2.5 million.  The falsified invoices and supporting Excel spreadsheets were forwarded 
to Senior Executive-1 for approval, with copies to Operations Officer-1.  Senior Executive-1 
approved payments in February and March 2015, and the payments were made to Contracting 
Firm-1 in installments between March 2015 and January 2016.    
Bribe Payment in Pune, Maharashtra 
 
15. The bribe scheme in Pune also involved the construction of a commercial office 
facility with Contracting Firm-1 as Cognizant’s builder.  Construction began in 2012, prior to the 
issuance of necessary permits.  On this occasion, Cognizant India authorized Contracting Firm-1 to 
pay an Indian official $770,000 in return for issuing an environmental clearance.  The payment was 
made in early 2013, and the environmental clearance was issued thereafter.  In April of that year, 
Contracting Firm-1 sought reimbursement through a change order request with a line item for 
“Liasoning [sic] and consultations charge towards Environmental clearance.”  Cognizant India 
rejected the change order, but later approved the payment after Contracting Firm-1 changed the 
rationale to “Change in the make of Workstation from Featherlite to Art matrix.”  Cognizant India 
reimbursed Contracting Firm-1 for the bribe payment in January 2014.   
Bribe Payment in Siruseri, Tamil Nadu 
 
16. In Siruseri, Cognizant India authorized Contracting Firm-1 to pay bribes totaling 
$840,000 to government officials for the issuance of several construction-related permits, including 
a planning permit, a power permit from the local electricity board, and an environmental clearance.  
Contracting Firm-1 made the payments in or around 2012, and Cognizant subsequently received 
the permits in the second half of that year.  The contractor submitted change order requests for 
several inflated or unjustified work items.  Cognizant India rejected the initial requests, but later 
approved the change orders after the sham descriptions were revised.  Cognizant India reimbursed 
Contracting Firm-1 for the bribe payments in installments between 2015 and 2016. 
 
Bribes for Operating Licenses 
 
17. In addition to payments involving the above construction projects, Cognizant India 
also made approximately $27,000 in bribe payments to government officials for the purpose of 
obtaining certain operating licenses at six Indian facilities.  The payments were made between 
2013 and early 2016, mostly by lower to mid-level employees in Cognizant India’s corporate 
workplace services department, with the assistance of collusive third party vendors.  The licenses 

 
 
 
5 
 
were for kitchen operating facilities, air and water consents, fire protection, and other purposes 
related to operation of the buildings.  The payments were disguised in Cognizant’s books and 
records by the use of false generic descriptions, such as “liaison,” “consulting,” and 
“miscellaneous” charges.   
 
Legal Standards and Violations 
 
18. Under Exchange Act Section 21C(a), 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. 
 
FCPA Violations 
 
19. Exchange Act Section 30A 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, in order to obtain or retain business, from corruptly giving or authorizing the 
giving of, anything of value to any foreign official for the purposes of influencing the official or 
inducing the official to act in violation of his or her lawful duties, or to secure any improper 
advantage, or to induce a foreign official to use his influence with a foreign governmental 
instrumentality to influence any act or decision of such government or instrumentality. [15 U.S.C. 
§ 78dd-1]. 
 
20. As described above, Cognizant paid bribes to an Indian government official to 
induce that official to direct that a permit be issued to facilitate the completion of a construction 
project.  Cognizant made use of the means and instrumentalities of interstate commerce by hosting 
video conferences at which American executives participated in formulating the scheme and by 
exchanging email messages to and from the United States to approve the concealing of the 
payment.  Two U.S. senior executives at Cognizant took active steps to advance the scheme, and 
Cognizant is liable for their conduct by respondeat superior.  As a result, Cognizant violated 
Exchange Act Section 30A.   
 
21. Exchange Act Section 13(b)(2)(A) requires every issuer with a class of securities 
registered pursuant to Exchange Act Section 12 to make and keep books, records, and accounts, 
which, in reasonable detail, accurately and fairly reflect the transactions and disposition of the 
assets of the issuer.  [15 U.S.C. § 78m(b)(2)(A)]. 
 
22. Cognizant violated Exchange Act Section 13(b)(2)(A) by falsely characterizing 
illicit payments to government officials as legitimate business expenses in its books and records.   
 
23. Exchange Act Section 13(b)(2)(B) requires every issuer with a class of securities 
registered pursuant to Exchange Act Section 12 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 

 
 
 
6 
 
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.  [15 U.S.C. § 78m(b)(2)(B)]. 
 
24. Cognizant violated Section 13(b)(2)(B) by failing to devise and maintain a 
sufficient system of internal accounting controls at its corporate headquarters and at Cognizant 
India.  Cognizant’s system for handling contractor change orders in India permitted managers to 
conceal bribe payments through the manipulation of bogus construction charges.  The company’s 
procurement process did not include an effective review of the disbursement of funds for change 
orders.  Nor did it include an effective review of the application or renewal of facility permits and 
licenses.  Cognizant also did not adequately enforce its corporate policy against making improper 
payments to government officials.  And it failed to provide reasonable assurances that its Indian 
subsidiary maintained accurate and complete records of transactions involving payments to 
government officials.   
 
Cognizant’s Self-Disclosure, Cooperation, and Remedial Efforts 
 
25. In determining to accept the Offer, the Commission considered Respondent’s self-
disclosure, cooperation, and remedial efforts.  Cognizant voluntarily disclosed this misconduct to 
the Commission staff and timely shared the facts developed during the course of an internal 
investigation by the audit committee of its board.  Cognizant also cooperated by voluntarily 
producing and translating documents, and making current or former employees, including those 
who needed to travel internationally, available for interviews by the Commission staff.   
 
26. Cognizant’s remedial actions included:  (i) terminating or imposing other discipline 
on officers and employees who participated in or were aware of the improper conduct; 
(ii) appointing new executive personnel, including a new president, general counsel, and heads of 
global real estate and procurement; (iii) enhancing its existing compliance function and headcount; 
(iv) consolidating its facility management operations and removing licensure responsibilities from 
third parties; (v) enhancing its internal accounting controls and compliance functions with respect 
to the construction of new facilities; (vi) enhancing its FCPA compliance policies relating to due 
diligence and contracting of vendors and suppliers; and (vii) conducting enhanced anticorruption 
training. 
 
Undertakings 
 
 Respondent Cognizant has undertaken to: 
 
27. Cooperate fully with the Commission in any and all investigations, litigations or 
other proceedings relating to or arising from the matters described in the Order.  Cognizant agrees 
that cooperation includes the following: 
 

 
 
 
7 
 
a. On an ongoing basis, producing, without service of a notice or subpoena, to 
the Commission nonprivileged documents and other materials, wherever 
located, in Respondent’s possession, custody, or control, and appropriate 
privilege logs, as requested by the Division of Enforcement’s (“Division”) 
staff and within 14 days of request unless otherwise agreed to in writing by 
the Division’s staff;   
 
b. Using its best efforts to secure the full, truthful, and continuing cooperation 
of Respondent’s current and former directors, officers, employees and 
agents, including making those persons available for interviews and the 
provision of testimony in any and all investigations, litigation or other 
proceedings relating to or arising from matters described in the Order when 
requested to do so by the Division’s staff, at Respondent’s expense; 
 
c. Using its best efforts to ensure its directors, officers and employees respond 
to all inquiries related to any and all investigations, litigation or other 
proceedings relating to or arising from the matters described in the Order 
and any related proceedings when requested to do so by the Division’s staff; 
and 
 
d. Using its best efforts to ensure its directors, officers, and employees testify 
at trial and other judicial or administrative proceedings when requested to 
do so by the Division’s staff. 
 
28. In determining whether to accept the Offer, the Commission has considered these 
undertakings. 
 
IV 
 
 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 
agreed to in Respondent Cognizant’s Offer. 
 
 Accordingly, it is hereby ORDERED that: 
 
 A. Pursuant to Section 21C of the Exchange Act, Respondent Cognizant 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. 
 
 B. Respondent shall, within 10 days of the entry of this Order, pay disgorgement of 
$16,394,351, prejudgment interest of $2,773,017, and a civil monetary penalty of $6,000,000 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 31 U.S.C. §3717 or SEC Rule of Practice 600.  Payment must be 
made in one of the following ways:   
 

 
 
 
8 
 
(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 website 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 
Cognizant as a 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 E. Cain, Chief, FCPA Unit, 
Division of Enforcement, Securities and Exchange Commission, 100 F St., NE, Washington, DC 
20549.   
 
 C. 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. 
 
 D. Respondent undertakes to: 
1) Report to the Commission staff periodically during a two-year term, the 
status of its remediation and implementation of compliance measures, particularly as to 
the areas of due diligence on prospective and existing third-party consultants and 
vendors, FCPA training and the testing of relevant controls including the collection and 
analysis of compliance data.  During this period, should Respondent discover credible 
evidence, not already reported to Commission staff, that questionable or corrupt 

 
 
 
9 
 
payments or questionable or corrupt transfers of value may have been offered, promised, 
paid, or authorized by Respondent, or any entity or person acting on behalf of 
Respondent, or that related false books and records have been maintained, Respondent 
shall promptly report such conduct to the Commission staff. During this two-year period, 
Respondent shall: (1) conduct an initial review and submit an initial report and 
(2) conduct and prepare two follow-up reviews and reports, as described below:  
a. Respondent shall submit to the Commission staff a written report 
within 180 calendar days of the entry of this Order setting forth a complete 
description of its FCPA and anti-corruption related remediation efforts to date, its 
proposals reasonably designed to improve the policies and procedures of 
Respondent for ensuring compliance with the FCPA and other applicable 
anticorruption laws, and the parameters of the subsequent review (the “Initial 
Report”).  The Initial Report shall be transmitted to Robert I. Dodge, Assistant 
Director, United States Securities and Exchange Commission, 100 F Street, NE, 
Washington, DC, 20549-5631.  Respondent may extend the time period for 
issuance of the Initial Report with prior written approval of the Commission staff.  
b. Respondent shall undertake two follow-up reviews, incorporating 
any comments provided by the Commission staff on the previous report, to further 
monitor and assess whether the policies and procedures of Respondent are 
reasonably designed to detect and prevent violations of the FCPA and other 
applicable anti-corruption laws (the “Follow-Up Reports”).  
c. The Follow-up Report shall be completed by no later than 270 
days after the Initial Report.  The second Follow-up Report shall be completed by 
no later than 450 days after the completion of the Initial Report.  Respondent may 
extend the time period for issuance of the Follow-up Reports with prior written 
approval of the Commission staff.  
d. The periodic reviews and reports submitted by Respondent will 
likely include proprietary, financial, confidential, and competitive business 
information.  Public disclosure of the reports could discourage cooperation, 
impede pending or potential government investigations and thus undermine the 
objectives of the reporting requirement.  For these reasons, among others, the 
reports and the contents thereof are intended to remain and shall remain 
nonpublic, except (a) pursuant to court order, (b) as agreed by the parties in 
writing, (c) to the extent that the Commission staff determines in its sole 
discretion that disclosure would be in furtherance of the Commission’s discharge 
of its duties and responsibilities, or (d) is otherwise required by law.  
e. During this two-year period of review, Respondent shall provide 
its external auditors with its annual internal audit plan and reports of the results of 
internal audit procedures and its assessment of its FCPA compliance policies and 
procedures.  

 
 
 
10 
 
f. During the two-year period of review, Respondent shall provide 
Commission staff with any written reports or recommendations provided by 
Respondent’s external auditors in response to Respondent’s annual internal audit 
plan, reports of the results of internal audit procedures, and its assessment of its 
FCPA compliance policies and procedures.  
2) Certify, in writing, compliance with the undertaking(s) set forth above. 
The certification shall identify the undertaking(s), provide written evidence of 
compliance in the form of a narrative, and be supported by exhibits sufficient to 
demonstrate compliance.  The Commission staff may make reasonable requests for 
further evidence of compliance, and Respondent agrees to provide such evidence. The 
certification and supporting material shall be submitted to Robert I. Dodge, Assistant 
Director, United States Securities and Exchange Commission, 100 F Street, NE, 
Washington, DC, 20549-5631 no later than sixty (60) days from the date of the 
completion of the undertakings.  
 
 By the Commission. 
 
 
       Brent J. Fields 
       Secretary 

UNITED STATES OF AMERICA 

Before the 

SECURITIES AND EXCHANGE COMMISSION 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 85149 / February 15, 2019 

 

ACCOUNTING AND AUDITING ENFORCEMENT 

Release No. 4021 / February 15, 2019 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-19000 

 

 

In the Matter of 

 

 COGNIZANT TECHNOLOGY 

 SOLUTIONS 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 Cognizant Technology Solutions Corporation 

(“Cognizant” or “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. 



 

 

 

2 

 

III 
 

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

 

Summary 

 

1. These proceedings arise from violations of the antibribery, books and records, and 

internal accounting controls provisions of the Foreign Corrupt Practices Act of 1977 (the “FCPA”). 

[15 U.S.C. § 78dd].  Cognizant is a global provider of information technology and business process 

services.  Much of its business involves using technically skilled workers around the world, 

including in India, to provide such services to companies in the United States and Western Europe.  

Between 2014 and 2016 Cognizant, acting through executives in the United States and India, 

authorized contractors to pay on the company’s behalf and reimbursed them for a total of 

approximately $3.6 million in bribes to Indian government officials to obtain government 

construction-related permits and operating licenses in connection with the construction and 

operation of commercial office buildings.   

 

2. In 2014 Cognizant authorized a contractor to pay a $2 million bribe to a senior 

government official for the issuance of a planning permit for a project in Chennai, India. The 

payment, along with a scheme to conceal a $2.5 million reimbursement to the contractor, was 

authorized by two senior executives at Cognizant’s U.S. headquarters.  In 2013 and 2014, 

Cognizant’s Indian subsidiary authorized the same third party contractor to pay a bribe of 

approximately $770,000 to a government official for an environmental clearance for a project in 

Pune, India.  In 2015, the Indian subsidiary retroactively authorized and reimbursed the same third 

party contractor for approximately $870,000 in bribes that it had paid to government officials for 

construction-related permits in Siruseri, India.  Cognizant received ill-gotten gains of approximately 

$16,394,351 as a result of the conduct.     

 

3. The unlawful payments were paid from Cognizant India’s bank accounts and were 

not accurately reflected in Cognizant’s consolidated books and records.  During the relevant period 

Cognizant also failed to devise and maintain a sufficient system of internal accounting controls at its 

corporate headquarters and at Cognizant India.  This conduct took place in an environment in which 

Cognizant failed to adequately enforce  its corporate antibribery and anticorruption policies. 

 

4. As a result of its conduct Cognizant violated Exchange Act Sections 30A, 

13(b)(2)(A), and 13(b)(2)(B).  

 

Respondent 
 

5. Cognizant is a New Jersey corporation headquartered in Teaneck, N.J.  Throughout 

the relevant period its common stock was registered with the Commission under Exchange Act 

                                                 
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.   

 



 

 

 

3 

 

Section 12(b) and publicly traded on NASDAQ (symbol: CTSH).  Cognizant files annual and 

quarterly reports under Exchange Act Section 13.  Although it operates in several countries, the 

majority of Cognizant’s operations are conducted in India through Cognizant India, its largest 

subsidiary.   

Other Relevant Individuals and Entities 
 

6. Senior Executive-1 served in several senior executive positions at Cognizant in the 

United States until his resignation in 2016. 

 

7. Senior Legal Executive-1 served in Cognizant’s legal function in the United States 

until his resignation in 2016. 

 

8. Operations Officer-1 served in a senior operation role based in India until 2016. 

 

9. Real Estate Officer-1 served in Cognizant India’s corporate workplace function. 

 

10. Contracting Firm-1 is a multinational engineering and construction firm based in 

India.  It is publicly traded on exchanges in India but its securities are not registered with the 

Commission. 

 

Facts 

 

Bribe Payments in Chennai, Tamil Nadu 
 

11. Cognizant’s construction project in Chennai, referred to as the KITS campus, 

represents the company’s  largest owned facility in India, encompassing 2.7 million square feet 

with a capacity for approximately 17,500 employees.  Cognizant engaged Contracting Firm-1 to 

build the facility and obtain all necessary government permits.  Construction began in 2011 prior to 

the issuance of a required planning permit.    

12. In 2014, during the course of construction, Real Estate Officer-1 was made aware 

that an Indian government official had made a $2 million bribe demand to Contracting Firm-1 as a 

condition for issuing the planning permit.  Real Estate Officer-1 passed the information along to 

his supervisor, Operations Officer-1.  On April 21 and 22, 2014, the demand was discussed by 

video conference among Real Estate Officer-1, Operations Officer-1, Senior Executive-1, and 

Senior Legal Executive-1.  Senior Executive-1 and Senior Legal Executive-1 participated in the 

conference from the United States.  Real Estate Officer-1 described the bribe demand in detail, 

asked Senior Executive-1 and Senior Legal Executive-1 for guidance on how to proceed, and 

suggested that Contracting Firm-1 could be reimbursed for the payment through a series of sham 

change order requests to its contract.  Senior Legal Executive-1 approved the method of 

reimbursement and Senior Executive-1 authorized both the bribe payment and the suggested 

method for disguising it.  Real Estate Officer-1 was given the task of executing the scheme.  His 

direct supervisor Operations Officer-1 made no objection.   

 

13. In addition to discussing the bribe demand and the suggested method of disguising 

the reimbursement during the videoconferences, Senior Executive-1 directed his subordinates to 



 

 

 

4 

 

withhold future payments to Contracting Firm-1 if it resisted paying the bribe on Cognizant’s 

behalf.  Contracting Firm-1, which had been urging Cognizant to make the payment itself, 

ultimately yielded to Senior Executive-1’s pressure and made the payment in late May or early 

June 2014.  Cognizant received the planning permit in November of that year.   

 

14. Following Real Estate Officer-1’s suggestion, Cognizant concealed the $2.5 million 

reimbursement to Contracting Firm-1, including both the $2 million bribe and a $500,000 

commission for paying it, through a series of falsified contract change orders.  Real Estate 

Officer-1 selected change order requests from Contracting Firm-1 invoices that Cognizant had 

previously rejected and retroactively “accepted” them, adjusting the cost amounts so that they 

would total $2.5 million.  The falsified invoices and supporting Excel spreadsheets were forwarded 

to Senior Executive-1 for approval, with copies to Operations Officer-1.  Senior Executive-1 

approved payments in February and March 2015, and the payments were made to Contracting 

Firm-1 in installments between March 2015 and January 2016.    

Bribe Payment in Pune, Maharashtra 

 

15. The bribe scheme in Pune also involved the construction of a commercial office 

facility with Contracting Firm-1 as Cognizant’s builder.  Construction began in 2012, prior to the 

issuance of necessary permits.  On this occasion, Cognizant India authorized Contracting Firm-1 to 

pay an Indian official $770,000 in return for issuing an environmental clearance.  The payment was 

made in early 2013, and the environmental clearance was issued thereafter.  In April of that year, 

Contracting Firm-1 sought reimbursement through a change order request with a line item for 

“Liasoning [sic] and consultations charge towards Environmental clearance.”  Cognizant India 

rejected the change order, but later approved the payment after Contracting Firm-1 changed the 

rationale to “Change in the make of Workstation from Featherlite to Art matrix.”  Cognizant India 

reimbursed Contracting Firm-1 for the bribe payment in January 2014.   

Bribe Payment in Siruseri, Tamil Nadu 

 

16. In Siruseri, Cognizant India authorized Contracting Firm-1 to pay bribes totaling 

$840,000 to government officials for the issuance of several construction-related permits, including 

a planning permit, a power permit from the local electricity board, and an environmental clearance.  

Contracting Firm-1 made the payments in or around 2012, and Cognizant subsequently received 

the permits in the second half of that year.  The contractor submitted change order requests for 

several inflated or unjustified work items.  Cognizant India rejected the initial requests, but later 

approved the change orders after the sham descriptions were revised.  Cognizant India reimbursed 

Contracting Firm-1 for the bribe payments in installments between 2015 and 2016. 

 

Bribes for Operating Licenses 

 

17. In addition to payments involving the above construction projects, Cognizant India 

also made approximately $27,000 in bribe payments to government officials for the purpose of 

obtaining certain operating licenses at six Indian facilities.  The payments were made between 

2013 and early 2016, mostly by lower to mid-level employees in Cognizant India’s corporate 

workplace services department, with the assistance of collusive third party vendors.  The licenses 



 

 

 

5 

 

were for kitchen operating facilities, air and water consents, fire protection, and other purposes 

related to operation of the buildings.  The payments were disguised in Cognizant’s books and 

records by the use of false generic descriptions, such as “liaison,” “consulting,” and 

“miscellaneous” charges.   

 

Legal Standards and Violations 
 

18. Under Exchange Act Section 21C(a), 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. 

 

FCPA Violations 
 

19. Exchange Act Section 30A 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, in order to obtain or retain business, from corruptly giving or authorizing the 

giving of, anything of value to any foreign official for the purposes of influencing the official or 

inducing the official to act in violation of his or her lawful duties, or to secure any improper 

advantage, or to induce a foreign official to use his influence with a foreign governmental 

instrumentality to influence any act or decision of such government or instrumentality. [15 U.S.C. 

§ 78dd-1]. 

 

20. As described above, Cognizant paid bribes to an Indian government official to 

induce that official to direct that a permit be issued to facilitate the completion of a construction 

project.  Cognizant made use of the means and instrumentalities of interstate commerce by hosting 

video conferences at which American executives participated in formulating the scheme and by 

exchanging email messages to and from the United States to approve the concealing of the 

payment.  Two U.S. senior executives at Cognizant took active steps to advance the scheme, and 

Cognizant is liable for their conduct by respondeat superior.  As a result, Cognizant violated 

Exchange Act Section 30A.   

 

21. Exchange Act Section 13(b)(2)(A) requires every issuer with a class of securities 

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

which, in reasonable detail, accurately and fairly reflect the transactions and disposition of the 

assets of the issuer.  [15 U.S.C. § 78m(b)(2)(A)]. 

 

22. Cognizant violated Exchange Act Section 13(b)(2)(A) by falsely characterizing 

illicit payments to government officials as legitimate business expenses in its books and records.   

 

23. Exchange Act Section 13(b)(2)(B) requires every issuer with a class of securities 

registered pursuant to Exchange Act Section 12 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 



 

 

 

6 

 

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.  [15 U.S.C. § 78m(b)(2)(B)]. 

 

24. Cognizant violated Section 13(b)(2)(B) by failing to devise and maintain a 

sufficient system of internal accounting controls at its corporate headquarters and at Cognizant 

India.  Cognizant’s system for handling contractor change orders in India permitted managers to 

conceal bribe payments through the manipulation of bogus construction charges.  The company’s 

procurement process did not include an effective review of the disbursement of funds for change 

orders.  Nor did it include an effective review of the application or renewal of facility permits and 

licenses.  Cognizant also did not adequately enforce its corporate policy against making improper 

payments to government officials.  And it failed to provide reasonable assurances that its Indian 

subsidiary maintained accurate and complete records of transactions involving payments to 

government officials.   

 

Cognizant’s Self-Disclosure, Cooperation, and Remedial Efforts 
 

25. In determining to accept the Offer, the Commission considered Respondent’s self-

disclosure, cooperation, and remedial efforts.  Cognizant voluntarily disclosed this misconduct to 

the Commission staff and timely shared the facts developed during the course of an internal 

investigation by the audit committee of its board.  Cognizant also cooperated by voluntarily 

producing and translating documents, and making current or former employees, including those 

who needed to travel internationally, available for interviews by the Commission staff.   

 

26. Cognizant’s remedial actions included:  (i) terminating or imposing other discipline 

on officers and employees who participated in or were aware of the improper conduct; 

(ii) appointing new executive personnel, including a new president, general counsel, and heads of 

global real estate and procurement; (iii) enhancing its existing compliance function and headcount; 

(iv) consolidating its facility management operations and removing licensure responsibilities from 

third parties; (v) enhancing its internal accounting controls and compliance functions with respect 

to the construction of new facilities; (vi) enhancing its FCPA compliance policies relating to due 

diligence and contracting of vendors and suppliers; and (vii) conducting enhanced anticorruption 

training. 

 

Undertakings 
 

 Respondent Cognizant has undertaken to: 

 

27. Cooperate fully with the Commission in any and all investigations, litigations or 

other proceedings relating to or arising from the matters described in the Order.  Cognizant agrees 

that cooperation includes the following: 

 



 

 

 

7 

 

a. On an ongoing basis, producing, without service of a notice or subpoena, to 

the Commission nonprivileged documents and other materials, wherever 

located, in Respondent’s possession, custody, or control, and appropriate 

privilege logs, as requested by the Division of Enforcement’s (“Division”) 

staff and within 14 days of request unless otherwise agreed to in writing by 

the Division’s staff;   

 

b. Using its best efforts to secure the full, truthful, and continuing cooperation 

of Respondent’s current and former directors, officers, employees and 

agents, including making those persons available for interviews and the 

provision of testimony in any and all investigations, litigation or other 

proceedings relating to or arising from matters described in the Order when 

requested to do so by the Division’s staff, at Respondent’s expense; 

 

c. Using its best efforts to ensure its directors, officers and employees respond 

to all inquiries related to any and all investigations, litigation or other 

proceedings relating to or arising from the matters described in the Order 

and any related proceedings when requested to do so by the Division’s staff; 

and 

 

d. Using its best efforts to ensure its directors, officers, and employees testify 

at trial and other judicial or administrative proceedings when requested to 

do so by the Division’s staff. 

 

28. In determining whether to accept the Offer, the Commission has considered these 

undertakings. 

 

IV 

 

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

agreed to in Respondent Cognizant’s Offer. 

 

 Accordingly, it is hereby ORDERED that: 

 

 A. Pursuant to Section 21C of the Exchange Act, Respondent Cognizant 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. 

 

 B. Respondent shall, within 10 days of the entry of this Order, pay disgorgement of 

$16,394,351, prejudgment interest of $2,773,017, and a civil monetary penalty of $6,000,000 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 31 U.S.C. §3717 or SEC Rule of Practice 600.  Payment must be 

made in one of the following ways:   

 



 

 

 

8 

 

(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 website 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 

Cognizant as a 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 E. Cain, Chief, FCPA Unit, 

Division of Enforcement, Securities and Exchange Commission, 100 F St., NE, Washington, DC 

20549.   

 

 C. 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. 

 

 D. Respondent undertakes to: 

1) Report to the Commission staff periodically during a two-year term, the 

status of its remediation and implementation of compliance measures, particularly as to 

the areas of due diligence on prospective and existing third-party consultants and 

vendors, FCPA training and the testing of relevant controls including the collection and 

analysis of compliance data.  During this period, should Respondent discover credible 

evidence, not already reported to Commission staff, that questionable or corrupt 



 

 

 

9 

 

payments or questionable or corrupt transfers of value may have been offered, promised, 

paid, or authorized by Respondent, or any entity or person acting on behalf of 

Respondent, or that related false books and records have been maintained, Respondent 

shall promptly report such conduct to the Commission staff. During this two-year period, 

Respondent shall: (1) conduct an initial review and submit an initial report and 

(2) conduct and prepare two follow-up reviews and reports, as described below:  

a. Respondent shall submit to the Commission staff a written report 

within 180 calendar days of the entry of this Order setting forth a complete 

description of its FCPA and anti-corruption related remediation efforts to date, its 

proposals reasonably designed to improve the policies and procedures of 

Respondent for ensuring compliance with the FCPA and other applicable 

anticorruption laws, and the parameters of the subsequent review (the “Initial 

Report”).  The Initial Report shall be transmitted to Robert I. Dodge, Assistant 

Director, United States Securities and Exchange Commission, 100 F Street, NE, 

Washington, DC, 20549-5631.  Respondent may extend the time period for 

issuance of the Initial Report with prior written approval of the Commission staff.  

b. Respondent shall undertake two follow-up reviews, incorporating 

any comments provided by the Commission staff on the previous report, to further 

monitor and assess whether the policies and procedures of Respondent are 

reasonably designed to detect and prevent violations of the FCPA and other 

applicable anti-corruption laws (the “Follow-Up Reports”).  

c. The Follow-up Report shall be completed by no later than 270 

days after the Initial Report.  The second Follow-up Report shall be completed by 

no later than 450 days after the completion of the Initial Report.  Respondent may 

extend the time period for issuance of the Follow-up Reports with prior written 

approval of the Commission staff.  

d. The periodic reviews and reports submitted by Respondent will 

likely include proprietary, financial, confidential, and competitive business 

information.  Public disclosure of the reports could discourage cooperation, 

impede pending or potential government investigations and thus undermine the 

objectives of the reporting requirement.  For these reasons, among others, the 

reports and the contents thereof are intended to remain and shall remain 

nonpublic, except (a) pursuant to court order, (b) as agreed by the parties in 

writing, (c) to the extent that the Commission staff determines in its sole 

discretion that disclosure would be in furtherance of the Commission’s discharge 

of its duties and responsibilities, or (d) is otherwise required by law.  

e. During this two-year period of review, Respondent shall provide 

its external auditors with its annual internal audit plan and reports of the results of 

internal audit procedures and its assessment of its FCPA compliance policies and 

procedures.  



 

 

 

10 

 

f. During the two-year period of review, Respondent shall provide 

Commission staff with any written reports or recommendations provided by 

Respondent’s external auditors in response to Respondent’s annual internal audit 

plan, reports of the results of internal audit procedures, and its assessment of its 

FCPA compliance policies and procedures.  

2) Certify, in writing, compliance with the undertaking(s) set forth above. 

The certification shall identify the undertaking(s), provide written evidence of 

compliance in the form of a narrative, and be supported by exhibits sufficient to 

demonstrate compliance.  The Commission staff may make reasonable requests for 

further evidence of compliance, and Respondent agrees to provide such evidence. The 

certification and supporting material shall be submitted to Robert I. Dodge, Assistant 

Director, United States Securities and Exchange Commission, 100 F Street, NE, 

Washington, DC, 20549-5631 no later than sixty (60) days from the date of the 

completion of the undertakings.  

 

 By the Commission. 

 

 

       Brent J. Fields 

       Secretary