MANHATTAN (CN) – FalconStor Software, a Long Island data storage company, will pay $5.8 million to settle federal charges that it paid bribes to get business with a subsidiary of J.P. Morgan Chase & Co., the SEC said Wednesday.
FalconStor admitted it paid the bribes and agreed to pay a $2.9 million fine, the SEC said. That settlement must be approved by a judge.
It will pay another $2.9 million under a deferred prosecution with federal prosecutors, who filed criminal charges against the Melville, N.Y.-based company, according to the SEC statement.
“FalconStor’s now deceased co-founder, chairman, and former chief executive ordered the bribes, which were paid to three executives of the subsidiary, JPMorgan Chase Bank, National Association, and their relatives, starting in October 2007,” the SEC said in the statement. “Lavish entertainment at casinos, and payments in cash, traveler’s checks, gift cards, and grants of FalconStor options and restricted stock, helped FalconStor secure a multimillion-dollar contract with the J.P. Morgan Chase subsidiary.”