Wipro to pay $5 million to close SEC investigation
ipro said it agreed to pay a civil money penalty of $5 million to the US Securities and Exchange Commission (SEC) as part of its process to close a six-year old embezzlement investigation by the market regulator.
India’s third-largest IT services provider was being investigated by the SEC since 2010 for allegedly violating certain provisions of the Securities Exchange Act, 1934 after Wipro found in December 2009 that a junior employee had stolen $4 million from the company.
“In agreeing to the settlement, the company neither admits nor denies the SEC’s allegations that the company violated certain provisions of the Securities Exchange Act of 1934 (Exchange Act),” Wipro said in a statement filed with the BSE on Friday .
The employee worked in Wipro’s ‘controllership’ division of the finance department, which was disbanded after the fraud. The division was responsible for keeping the company’s financial books and had powers to authorise payments whenever required. Wipro recovered about half the amount.
The employee committed suicide after the incident came to light in 2010. Wipro later brought in internal consultants to investigate the case and fixed its internal processes. Wipro consented to cease and desist from committing or causing violations of the regulations and to undertake certain follow-through actions.