Oracle ( ORCL Quick Quote ORCL - Free Report) has settled with the Securities and Exchange Commission (SEC) after it was charged with violating the Foreign Corrupt Practices Act (FCPA) for the second time. The company did not deny the SEC’s findings and will pay more than $23 million to settle the charges. Oracle will pay $8 million in disgorgement and the rest $15 million as a penalty to settle all the charges. According to the SEC report, Oracle violated provisions of the act between 2016 and 2019 when its subsidiaries in India, Turkey and the United Arab Emirates created slush funds that were used to bribe foreign officials. Oracle’s subsidiaries also used the funds to pay foreign officials to attend technology conferences, and in some cases, these funds were also used for officials’ families to either accompany them or take side trips. This is the second time that this Zacks Rank #4 (Sell) company has faced such a charge, with the previous instance also including the company’s India unit. The SEC fined Oracle $2 million in 2012 for setting aside about $2.2 million for unauthorized side funds in its India-based subsidiary. Increasing Instances of Employee Misconduct
In 2016, a representative from Oracle Turkey sales implemented a scheme where he falsely claimed that he needed a significant discount on a deal with Turkey’s Social Security Institute (SSI) due to intense competition from other vendors.
Oracle United Arab Emirates (UAE) sales employees used excessive discounts and marketing reimbursement payments to make slush funds at resellers from at least 2014 to 2019. An Oracle UAE sales account manager for a state-owned entity paid about $130,000 in bribes to the entity’s chief technology officer for six contracts between 2018 and 2019. Two resellers helped to fund the first three bribes with excessive discounts. The bribes were paid through an entity that was not an Oracle-approved reseller for public sector transactions. The only purpose for the entity was making bribes, although it was also used as a reseller for the final three deals. Oracle India’s sales employees reportedly used an excessive discount scheme that pertained to a transaction with a transportation company in which the majority owner is the Ministry of Railways. The employees working on the deal cited competition from other OEMs and alleged that the agreement would be lost if a 70% discount was not provided on the software component of the contract. Increasing Adoption of Cloud Offerings to Drive Top Line
Nonetheless, accelerated digital transformation along with the continuation of remote work and mainstream adoption of the hybrid work model is likely to drive demand for Oracle Cloud Infrastructure (“OCI”) services and the company’s other cloud-based applications in the near term.
BurgerFi ( BFI Quick Quote BFI - Free Report) has been expanding rapidly since going public in 2020. With over 124 locations spanning from Alaska to Saudi Arabia, the chain needed a restaurant point-of-sale system that could grow with them. With Oracle MICROS Simphony Cloud POS, the chain has been able to easily scale across corporate and franchise locations to improve operations while providing flawless interactions for customers. Key Corp’s ( KEY Quick Quote KEY - Free Report) KeyBank, one of the largest financial services companies in the United States, has modernized its non-real estate consumer lending process with Oracle. With Oracle Banking Originations, the bank can now service loan accounts in real-time from the initial application through to payments and collections, helping eliminate delays and improve customer service. Last month, Oracle renewed a strategic agreement with AT&T ( T Quick Quote T - Free Report) that will give new capacity and capabilities for the company’s database and application workloads running in Oracle Cloud. The new five-year deal will build on AT&T’s use of Oracle Fusion Cloud ERP, Oracle Fusion Cloud Customer Experience (CX), OCl, and other Oracle Cloud services. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.