As highlighted here, in mid-2019 Microsoft resolved a parallel DOJ and SEC Foreign Corrupt Practices Act enforcement action by agreeing to pay $25.3 million regarding conduct in Hungary, Saudi Arabia, Thailand and Turkey.
Pursuant to a three year DOJ non-prosecution agreement (which still remains in effect), Microsoft agreed (among other things) that should it “learn of any evidence or allegation of conduct that may constitute a violation of the FCPA anti-bribery or accounting provisions had the conduct occurred within the jurisdiction of the United States” to promptly report such evidence or allegation to the Fraud Section and the Office. Pursuant to the SEC administrative order, Microsoft was ordered to “cease and desist from committing or causing any violations and any future violations” of the FCPA’s books and records and internal controls provisions.
In this recent post on a whistleblower platform, Yasser Elabd (a former manger at Microsoft who worked at the company throughout the Middle East and Africa from 1998 to 2018) alleges that Microsoft employees were involved in widespread bribery schemes across several countries in the region.
As reported here:
“Mr. Elabd said one common practice at Microsoft involved company employees using local partner companies to help sell the company’s products to customers. Those companies would facilitate a kickback scheme in which customers would be granted discounts, but instead of it going to the customers, the discounts would be distributed among Microsoft employees, partners and sometimes government officials, he alleged.”
Mr. Elabd submitted his claims to the SEC in early 2019 [and] had a seven-hour meeting with SEC employees in the agency’s Washington offices.
Following the meeting with the SEC, Mr. Elabd submitted further information. Agency officials said that the investigation couldn’t go further, after pandemic conditions prevented them from gathering evidence abroad, Mr. Elabd said.”
According to reports, Microsoft recently said that it had fired some employees and terminated partnerships relevant to the allegations. A Microsoft VP and Deputy General Counsel stated: “We believe we’ve previously investigated these allegations which are many years old, and addressed them. We cooperated with government agencies to resolve any concerns.”