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Enforcement Action Dataset

 

Initiation Date:    02/15/2019  Information

Prosecuting Agency:    U.S. Securities and Exchange Commission

Type of Action:    SEC Administrative Proceeding

Docket or Case Number:    3-19000

Name of Prosecuting Attorneys:   

  • Michael K. Catoe, SEC Headquarters
  • Paul W. Sharratt, SEC Headquarters
  • M. Shahriar Masud, SEC Headquarters

US Assisting Agencies:   

  • U.S. Department of Justice
  • Federal Bureau of Investigation

Foreign Enforcement Action/Investigation:    Unknown

Foreign Assistance:    Unknown

Origin of the Proceeding:    Voluntary disclosure

Whistleblower:    Unknown

Case Status:    Resolved


Summary  Information

Cognizant Technology Solutions Corporation was a New Jersey corporation whose common stock was registered with the SEC and traded on the NASDAQ. The majority of Cognizant’s operations in India were conducted through Cognizant Technology Solutions India Private Limited, the company's largest subsidiary.

Gordon J. Coburn served in several senior executive positions, ultimately as President, at Cognizant until his resignation in 2016.

Steven E. Schwartz served as Cognizant’s Executive Vice President, Chief Legal and Corporate Affairs Officer until his resignation in 2016.

According to the documents in this case, between 2014 and 2016 Cognizant, acting through Coburn, Schwartz, and others, authorized contractors to pay approximately $3.6 million in bribes to various Indian government officials in order to obtain government construction-related permits and operating licenses in connection with the construction and operation of commercial office buildings. Specifically, Cognizant authorized a contractor to pay a $2 million bribe to a senior government official for a project in Chennai, India, a bribe of $770,000 to a government official in Pune, India, and bribe of approximately $870,000 to government officials in Siruseri, India. In all, Cognizant made profits of approximately $16.4 million as a result of the bribes.

In an administrative proceeding initiated on February 15, 2019, the SEC issued a cease and desist order against Cognizant. Under the terms of the proceeding, the SEC ordered Cognizant to cease and desist violations of the anti-bribery, books and records, and internal controls provisions of the FCPA. The SEC further ordered Cognizant to pay disgorgement of $16,394,351 plus prejudgment interest of $2,773,017 and a civil fine of $6 million.

In two related cases filed on the same day as the administrative proceeding against Cognizant, the SEC filed a civil complaint and the DOJ filed an indictment against Coburn and Schwatz for FCPA violations. Both of those cases are ongoing.

On February 13, 2019, the DOJ formally declined to prosecute Cognizant pursuant to the agency's FCPA Corporate Enforcement Policy.

In a related settled administrative proceeding initiated on September 13, 2019, the SEC ordered Sridhar Thiruvengadam, Cognizant's former Chief Operating Officer to cease and desist violations of the books and records and internal controls provisions of the FCPA as well as violations of Exchange Act Rule 13b2-2 requiring accurate statements in management letters. Under the terms of the settlement, the SEC also ordered Thiruvengadam to pay a civil penalty of $50,000, which the SEC noted was not greater due to Thiruvengadam's cooperation.

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