Cognizant has agreed to pay a $ 25 million fine to settle corruption charges, while two former senior executives who have arranged the deal have been charged today with federal criminal charges of conspiracy to violate anti-corruption laws. corruption.
"Corruption to achieve business goals is an illusory path to long-term success. While this is still the wrong choice, it is particularly outrageous that senior executives map this path to their leaders, as our complaint here claims. We have pledged to hold them accountable for their actions, "said Charles E. Cain, head of the anti-corruption unit in the SEC's Foreign Corrupt Practices Division, in a statement. Act or FCPA).
According to the complaint filed with the SEC, a senior Indian government official claimed in 2014 a $ 2 million bribe to the construction company building the Cognizant campus in Chennai, India. At the time, two-thirds of the company's employees worked in India.
As the complaint alleges, Gordon Coburn, President of Cognizant, and Steven E. Schwartz, Chief Legal Officer, authorized the contractor to pay the bribe and asked their subordinates to conceal it by modification of the contractor, "the SEC said in a statement. "Cognizant has authorized the construction company to pay two additional bribes totaling more than $ 1.6 million. Cognizant allegedly used fictitious change requests to disguise the payments made to pay the company back. "
In 2016, Teaneck Company No. 7 in New Jersey, based on the 2018 CRN Solutions Provider 500, initiated an internal investigation to determine whether payments for facilities in India had been improperly made and in potential violation of the FCPA or other laws, according to a filing with the US Securities and Exchange Commission.
The company voluntarily informed the US Department of Justice (DOJ) and the SEC of the investigation, and indicated that it was cooperating fully with both agencies.
Cognizant announced in September 2016 that Coburn had resigned as president after more than four years in the role. Coburn joined Cognizant in 1996 as Senior Director of Finance and Operations for the group. He rose through the ranks, spending many years as CFO.
"We are delighted to reach these resolutions with the US Department of Justice and the US Securities and Exchange Commission." With the announcements of today, we have taken a big step forward to remedy to this problem, "said Francisco D & # 39; Souza, vice president and CEO of Cognizant, in a statement. "In addition, we are pleased that the DOJ and the SEC have acknowledged that we have voluntarily and promptly informed US authorities of potential problems in India more than two years ago, and have cooperated extensively in their investigations."
The SEC has charged Coburn and Schwartz with the anti-corruption provisions, books and records and internal accounting controls of federal securities laws. The SEC is calling for permanent injunctions, monetary sanctions, and bans on officers and directors against Coburn and Schwartz.
At the same time, federal prosecutors have announced the prosecution of Coburn and Schwartz.
Coburn, 55, of Beaver Creek, Colorado, and Schwartz, 51, of Greenwich, Connecticut, have been named in an indictment on 12 counts of conspiracy to violate the FCPA , three counts of violation of the FCPA, seven counts of falsification of books. and records, and a charge to bypass and not implement internal accounting controls.