DOJ and SEC Investigating Microsoft FCPA Allegations

March 26, 2013 — Under the Foreign Corrupt Practices Act (FCPA), paying kickbacks to foreign officials to secure a business advantage is illegal. Some companies continue to ignore the statute, claiming that paying bribes is simply the “cost of doing business” in foreign countries. They may try to pressure employees in foreign offices to keep quiet about the illegal practice, or to participate. Many employees, however, decline to break the law and notify the U.S. government instead.

Preliminary Probe into Microsoft Kickbacks in China

Microsoft Corporation is the subject of investigations by the U.S. Department of Justice and the Securities and Exchange Commission concerning the software giant’s possible FCPA violations in China, Italy, and Romania, The Wall Street Journal reports.

Regarding China, investigators are looking into allegations that an executive with Microsoft’s subsidiary in China instructed an employee to offer illegal kickbacks to Chinese officials in exchange for their signatures on software contracts with the Chinese government. The allegations were made by an anonymous tipster who formerly worked for Microsoft, trying to secure new business in China. The tipster or FCPA whistleblower allegedly notified U.S. investigators in 2012. The same allegations are reported to have been investigated internally by Microsoft in 2010, with no evidence of wrongdoing uncovered.

With regard to Italy, federal investigators are said to be looking into Microsoft’s relationship with Italian consultants specializing in customer loyalty programs. At issue is whether Microsoft’s Italian division employed the consultants to deluge Italian procurement officials with gifts and lavish vacations in return for government contracts.

And in Romania, the U.S. government is investigating whether resellers acting on Microsoft’s behalf made bribes to Romanian officials in order to win contracts with Romania’s Ministry of Communications.

Microsoft claims to have 170 employees in charge of worldwide compliance with all of the company’s policies, including those related to anti-bribery and FCPA compliance.

Insider Employees Notify the SEC of Foreign Bribery

Insider employees who collaborate with the SEC when multinational corporations engage in foreign bribery may be eligible for financial awards under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) of 2010. FCPA tipsters deserve to know their rights under the law. The lawyers with Waters & Kraus provide skilled legal representation for whistleblowers who come forward with foreign bribery allegations. We ensure that your interests are advanced and protected. Contact us or phone our FCPA attorneys at 800.226.9880 to learn more about our whistleblower practice.

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