The former chief operating officer of New Jersey-based Cognizant Technology Solutions Corporation settled charges that he violated the Foreign Corrupt Practices Act by helping to bribe an Indian government official and then covering up the payment, the SEC said Friday.
Sridhar Thiruvengadam paid a penalty of $50,000 and agreed to cooperate with the SEC.
The agency resolved the case through an internal administrative order (pdf) and didn’t go to court.
A senior official from India’s Tamil Nadu state demanded a $2 million bribe from the construction firm that was building Cognizant’s 2.7 million square foot campus in Chennai. The bribe was in exchange for a building permit.
Four Cognizant executives, including Thiruvengadam, met by video conference to authorize the bribe payment and find a way to disguise it in the company’s books, the SEC said.
Thiruvengadam, 55, an Indian national, signed false subcertification letters to Cognizant’s independent auditor.
He served as the company’s chief operating officer from late 2013. Cognizant placed him on administrative leave in 2016 and he resigned in late 2018.
In February 2019, Cognizant paid about $25 million to resolve FCPA charges. The DOJ brought an enforcement action though a declination with disgorgement (pdf) and the SEC through an administrative order (pdf).
The DOJ also charged two other former Cognizant executives with multiple FCPA violations.
Cognizant’s former president, Gordon Coburn, and its former chief legal officer, Steven E. Schwartz, allegedly authorized the contractor in India to pay the bribe, and directed their subordinates to conceal the payment by doctoring the contractor’s change orders.
They were charged in a 12-count indictment (pdf) with one count of conspiracy to violate the Foreign Corrupt Practices Act, three counts of violating the FCPA, seven counts of falsifying books and records, and one count of circumventing and failing to implement internal accounting controls.
Coburn, 55, lives in Beaver Creek, Colorado, and Schwartz, 51, in Greenwich, Connecticut.
Cognizant provides technology-related outsourcing services. It has about 285,000 employees worldwide. It trades on Nasdaq under the symbol CTSH.
In Friday’s action, the SEC said Thiruvengadam violated the FCPA’s internal accounting controls and recordkeeping provisions.
He settled the charges without admitting or denying the SEC’s findings.
Richard L. Cassin is editor at large of the FCPA Blog.