Wipro agrees to pay $5 million to SEC to settle six-year-old case

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Bengaluru: Wipro Ltd, India’s third largest software firm, said it had reached a $5 million civil settlement with the Securities and Exchange Commission (SEC) to close a six-year investigation by the US market watchdog.

“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 sent to the stock exchange on Friday.

The SEC investigation started in September 2010 after Wipro found in December 2009 that a junior employee had embezzled $4 million from the company.

Wipro found that the employee had embezzled the money since November 2006 through multiple financial transactions, all of which had gone unnoticed by anyone at the company, because of then-lax internal processes.

Wipro later brought in internal consultants to investigate the case and fixed its internal processes.

“The company considers the settled resolution of this long-pending matter to be an efficient approach and in the best interests of the company and its investors to avoid the cost associated with a prolonged litigation,” said the statement.

“The SEC has credited the company’s cooperation and remedial measures in arriving at the settlement. Under the terms of the settlement, company consents to pay a civil money penalty of $5 million, to cease and desist from committing or causing violations of the Exchange Act, and to undertake certain follow through actions.”

“The company is pleased to formally resolve and put this six-year-old matter behind it,” it said.

Wipro shares fell 0.83% to Rs457.50 in afternoon trading on BSE Ltd; the benchmark Sensex was up 0.15% to 26,019.38 points.