As reported by the FCPA Professor last week, the Securities and Exchange Commission (SEC) announced the settlement of an action against Oracle for violations of the books and records provisions of the Foreign Corrupt Practices Act (FCPA). Unlike the Astros, who publicly announced their move to AAA status, Oracle got into FCPA hot water because its Indian subsidiary directed its distributor to set up a separate slush fund of monies which could be and were used to pay monies to persons unknown. According to the SEC Complaint, the scheme worked as follows: Oracle India would identify and work with the end user customers in selling products and services to them and negotiating the final price. However, the purchase order would be placed by the customer with Oracle India’s distributor. This distributor would then purchase the licenses and services directly from Oracle, and resell them to the customer at the higher price than had been negotiated by Oracle India. The difference between what the government end user paid the distributor and what the distributor paid Oracle typically is referred to as “margin” which the distributor generally retains as payment for its services. That description sounds like most distributor relationships but this was not what got Oracle into trouble.