The History of Bribery: Investors Over-React – So Watch for Bargains Among the Shamed and Fined
Oracle (ORCL) is paying $2 million to regulators to settle a bribery-related scandal. The Wall Street Journal reports that Oracle’s Indian subsidiary Oracle India Private Ltd. allegedly violated U.S. law when it set aside $2.2 million between 2005 and 2007. There's no evidence Oracle bribed officials, only that keeping its funds in a separate account created the opportunity for bribery.
The Avon (AVP) ladies must be paying attention. Avon has announced it’s talking with regulators about winding down its own long-running investigation involving bribery allegations. That is part of what’s been weighing on the stock.
To be sure, it has other problems, too. For more on those, read this.
Expect Avon to spend far more than Oracle when a settlement’s announced. Avon has spent $280 million on an investigation, according to the Journal. At this blog tracking Foreign Corrupt Practices Act news, Richard Cassin expects Avon to make the top-ten list of FCPA settlements.
But as we’ve said before about such settlements –- odds remain good that the amount, whatever it comes to, won’t break the bank.