Sun may have broken US bribery laws

Sun could face a heavy fine

Sun Microsystems has admitted that members of its staff may have bribed foreign officials.

The company said in a regulatory filing that it may have broken US laws, specifically the Foreign Corrupt Practices Act (FCPA). Sun has not given any details as to where the activity may have taken place.

"We have identified potential violations of the FCPA, the resolution of which could possibly have a material effect on our business," Sun said in a 10-Q filing with the US Securities and Exchange Commission (SEC).

The company said that it had taken "remedial action" and had notified the Justice Department and the SEC, both of which are investigating the case.

If found guilty Sun could face a heavy fine and possibly be banned from conducting business with the government.

Oracle, which has launched a bid to acquire Sun, said in a separate filing that it was aware of the case before it made the offer. The news will come as a further headache for the two companies, after shareholders filed to stop the deal.

Authorities around the world are looking more closely at bribery allegations in the IT industry.

Last year the former head of Samsung was found guilty of taking part in bribery and tax evasion. Prosecutors asked for seven years of jail time, but Lee Kun-hee escaped with a $109m fine and three years suspended jail time.

In December Siemens paid more than $1bn in fines in Germany and the US over charges that it had bribed government staff with cash in exchange for contracts.

In 2007 Alcatel-Lucent paid $2.5m over charges that Lucent Technologies, before it was bought by Alcatel, bribed Chinese officials with free business trips to drum up business.