September 13, 2019

Former Cognizant COO resolves foreign bribery investigation by SEC

On September 13, 2019, the US Securities and Exchange Commission (SEC) issued a cease-and-desist order against Sridhar Thiruvengadam. 

Thiruvengadam was Chief Operating Officer (COO) of Cognizant Technology Solutions Corporation (CTS) between 2013 and 2016.  In 2016, he was placed on administrative leave, and in 2018 he resigned.  According to the SEC, while serving as COO of CTS, Thiruvengadam—along with two other CTS executives, and an employee of CTS’s Indian subsidiary—participated in a scheme to pay a $2 million bribe to an Indian government official in exchange for a permit to build an office facility in Chennai, India.  Thiruvengadam participated in videoconferences discussing the bribe, raising no objection to the bribe or the proposed method of concealing it through a series of falsified contract change orders.  Thiruvengadam also signed false subcertifications in CTS’s management letters in order to conceal the nature of the corrupt payment.  

Thiruvengadam has agreed to cooperate with the SEC’s investigation (including testifying at trial or other proceedings), to cease and desist from committing or causing further violations of the books and records and internal controls provisions of the FCPA, as well as violations of Exchange Act Rule 13b2-2 (which requires accurate statements in management letters), and to pay a civil money penalty of $50,000.

CTS settled FCPA antibribery and accounting provisions charges with the SEC in February 2019, agreeing to pay approximately $25 million in fines, disgorgement, and prejudgment interest.  The DOJ declined to prosecute CTS.

In February 2019, the SEC filed a civil complaint in the District of New Jersey against Gordon Coburn (former CTS President) and Steven Schwartz (former CTS Chief Legal Officer), alleging violations of the FCPA’s anti-bribery and accounting provisions, and of making false statements to auditors.  Also in February 2019, the DOJ indicted Coburn and Schwartz for violations of the FCPA’s anti-bribery and accounting provisions.  Both the DOJ and SEC cases remain ongoing.