Photo by pexels.com

SEC Charges Cognizant and Two Former Executives With FCPA Violations

FOR IMMEDIATE RELEASE
2019-12

Washington D.C., Feb. 15, 2019 —
Cognizant Technology Solutions Corporation has agreed to pay $25 million to settle charges that it violated the Foreign Corrupt Practices Act (FCPA), and two of the company’s former executives were charged for their roles in facilitating the payment of millions of dollars in a bribe to an Indian government official.

The Securities and Exchange Commission’s complaint alleges that in 2014, a senior government official of the Indian state of Tamil Nadu demanded a $2 million bribe from the construction firm responsible for building Cognizant’s 2.7 million square foot campus in Chennai, India. As alleged in the complaint, Cognizant’s President Gordon Coburn and Chief Legal Officer Steven E. Schwartz authorized the contractor to pay the bribe, and directed their subordinates to conceal the bribe by doctoring the contractor’s change orders. The SEC also alleges that Cognizant authorized the construction firm to make two additional bribes totaling more than $1.6 million. Cognizant allegedly used sham change order requests to conceal the payments it made to reimburse the firm.

“Bribery to further corporate goals is an illusory path to long-term success. While always the wrong choice, it is particularly egregious when senior executives chart that course for those they lead, as our complaint alleges here. We are committed to holding them accountable for their actions,” said Charles E. Cain, Chief of the SEC Enforcement Division’s FCPA Unit.

The SEC charged Coburn and Schwartz with violating anti-bribery, books and records, and internal accounting controls provisions of the federal securities laws. The SEC is seeking permanent injunctions, monetary penalties, and officer-and-director bars against Coburn and Schwartz.

The SEC’s order as to Cognizant found that the company violated Sections 30A, 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934, which are anti-bribery, books and records, and internal accounting controls provisions of the federal securities laws. Without admitting or denying the allegations, the company agreed to pay disgorgement and prejudgment interest of approximately $19 million and a penalty of $6 million.

The Department of Justice and the U.S. Attorney’s Office for the District of New Jersey today announced the indictment of Coburn and Schwartz on criminal charges of violating and conspiring to violate the FCPA’s anti-bribery and accounting provisions.

The SEC’s investigation was conducted by Michael K. Catoe, Paul W. Sharratt, and M. Shahriar Masud of the FCPA Unit under the supervision of Robert I. Dodge. The litigation will be led by John Bowers. The SEC appreciates the assistance of the Justice Department’s Fraud Section, the U.S. Attorney’s Office for the District of New Jersey, and the Federal Bureau of Investigation.

###
Source:
https://www.sec.gov/news/press-release/2019-12

Check Also

Image of the US Economy

The Conference Board Leading Economic Index® (LEI) for the U.S. Increased; Economy to Continue Expanding in Near-Term

The ten components of The Conference Board Leading Economic Index® for the U.S. include:Average weekly hours, manufacturingAverage weekly initial claims for unemployment insuranceManufacturers' new orders, consumer goods and materialsISM® Index of New OrdersManufacturers' new orders, nondefense capital goods excluding aircraft ordersBuilding permits, new private housing unitsStock prices, 500 common stocksLeading Credit Index™Interest rate spread, 10-year Treasury bonds less federal fundsAverage consumer expectations for business conditionsFor full press release and technical notes:http://www.conference-board.org/data/bcicountry.cfm?cid=1

Growth stock image

Willamette Valley Vineyards Posts a Profit for 2018

Jim Bernau, Founder and President of the winery, said "We are pleased Income from Operations was up 15% for the year. Earnings are affected by the dividend cost as we raised the money needed for the planned winery near Dundee prior to construction. As we are able to deploy these development funds, we expect the projected earnings to more than offset the higher dividend costs."

Investing pennies

SEC Proposes Offering Reforms for Business Development Companies and Registered Closed-End Funds

The proposed amendments would modify the registration, communications, and offering processes available to BDCs and registered closed-end funds, building on offering practices that operating companies currently use.

Investment

Data Experts Outline Success Factors for Registered/Private Funds

The different types of data in the fund industry (e.g., external sources and internal sources created by the fund)Defining classification vs. segmentationSegmentation best practices"The asset management industry needs powerful information to navigate the challenges of volatile investment markets, unprecedented regulatory changes and transformational shifts in investors' product preferences," said Mr. Kosanovic. "Technology can help fund managers visualize their data in ways to help them optimally spend their time and resources with greater efficiency to grow their funds."

Alert image

Investor Alerts and Bulletins: The Escheatment Process

Keep your contact information updated. Financial institutions must attempt to notify you before escheating your account. Make sure financial institutions at which you have accounts have your accurate contact information (telephone, e-mail and physical address) to help ensure you receive any notices related to your accounts. If your financial institution sends you mail that is returned as undeliverable, or it cannot reach you through your other contact information, your account may be declared abandoned and end up in escheatment.

Investor Image

SEC Announces March 28 Meeting of Investor Advisory Committee

Members of the committee represent a wide variety of investor interests, including those of individual and institutional investors, senior citizens, and state securities commissions. For a full list of committee members, see the committee’s webpage.

GDP Growth Slowed

US Economy Starts to Slow Entering 2019, but Headwinds Ease

The Federal Reserve has signaled that it will postpone further interest rate hikes until signs of rising inflation emerge and cease balance sheet normalization activities towards the end of this year. Stock price gains since the announcement of these policy shifts illustrate that if they are executed, business confidence is likely to rise.

%d bloggers like this: