Sun Micro Says It May Have Broken Bribery Laws

In the middle of a blockbuster takeover by Oracle Corp., Sun Microsystems has admitted that it may have violated U.S. anti-bribery statutes recently.

According to a news report from the Associated Press, the management at Sun has informed the U.S. Department of Justice and the Securities and Exchange Commission that an internal review found evidence of wrongdoing in transactions committed on its behalf. The AP report notes that Sun revealed the potentially illegal activity to executives at Oracle prior to the announcement of its US $7.4 billion acquisition offer three weeks ago. The alleged bribery took place in an unspecified location outside of the United States by one or more unnamed individuals, the AP reported Friday, drawing on public documents filed with the SEC.

The regulatory statements from Sun stated that the Santa Clara, Calif., computer firm had found "potential violations" of the Foreign Corrupt Practices Act by its employees and that it has since taken remedial measures to begin making amends. The Justice Department and the SEC have reportedly opened investigations into the matter. The AP was unable to get a spokesperson for Sun to comment officially on the news.

Liability for the illicit activity could range from hefty fines to criminal indictments, with the federal government possibly even banning Sun from participation in future government contract awards for a period, a major source of revenue for Sun.

The news of corruption within its midst marks yet another black eye for Sun, which has been roiled by management blunders in recent years. Look for the resignation of a top executive at Sun to be forthcoming in the weeks ahead, at the very least.