Wednesday, October 28, 2020

Microsoft settles bribery case for over $25 million


Microsoft on Monday agreed to pay more than $25 million to settle a case alleging the software giant violated a federal anti-bribery law, according to the Department of Justice (DOJ).

The company will pay the fees, including an $8.75 million criminal fine imposed on its Microsoft Hungary unit and over $16 million to the Securities and Exchange Commission (SEC), to settle the charges.

Microsoft Hungary, a wholly-owned subsidiary of Microsoft, admitted that it participated in a scheme between 2013 and 2015 to inflate margins on software sales and ultimately use the savings for “corrupt purposes,” according to the DOJ.

“According to Microsoft Hungary’s admissions, beginning by at least 2013 and continuing until at least 2015, a senior executive and other employees of Microsoft Hungary participated in a scheme to inflate margins in the Microsoft sales channel in connection with the sale of Microsoft software licenses to Hungarian government agencies,” the DOJ statement reads.

- Advertisement -

Read MoreMicrosoft reportedly facing bribery probe in Hungary

“In furtherance of that scheme, Microsoft Hungary executives and employees falsely represented to Microsoft that steep discounts were necessary to conclude deals with resellers who bid for the opportunity to sell Microsoft licenses to government customers,” it adds. “In actuality, the savings were not passed on to the government customers, but instead were used for corrupt purposes and were falsely recorded as ‘discounts.’ “

The savings were stored on Microsoft servers in the U.S., violating the Foreign Corrupt Practices Act, a 1977 law that prohibits U.S. companies from paying bribes to foreign officials to sweeten business deals.

Microsoft entered into a nonprosecution agreement with the DOJ over the case, and agreed to a cease-and-desist order with the SEC on related charges.

- Advertisement -

Microsoft President Brad Smith in an email to employees said the company “does not tolerate employees and partners who willfully break policies that go to fundamental issues of business integrity.”

Smith noted that all of the employees involved are “no longer with the company” and Microsoft terminated relationships with four resellers as a result of their investigation into the Hungary conduct.

Federal regulators have also investigated Microsoft’s dealings in Italy, China and Romania for potential violations of foreign corruption laws.

“We recognize that no business process can offer a perfect guarantee of eliminating all global instances of a human frailty that is as old as humanity itself,” Smith wrote. “That’s why we need strong laws and effective enforcement by agencies such as the DOJ and the SEC in the United States and around the world.”


Beam Suntory Inc. fined $19.6 million in foreign bribery case

Beam Suntory Inc. (Beam), a Chicago-based company that produces and sells distilled beverages, has agreed to pay a criminal monetary penalty of $19,572,885 to...

Julius Baer to deny two former CEOs their bonuses over money laundering scandal

Julius Baer will withhold millions of francs in bonuses from its former chief executives Boris Collardi and Bernhard Hodler, as a result of a...

Goldman Sachs executives to cover part payments of $3 billion fines in 1MDB scandal

Nine current or former Goldman Sachs executives, including CEO David Solomon, will have to pay back hundreds of millions of dollars in compensation over...

Goldman Sachs agrees $3 billion settlement with US DoJ over 1MDB corruption scandal

Goldman Sachs has agreed to pay nearly $3bn (£2.3bn) in the US to end a probe of its role in Malaysia's 1MDB corruption scandal. The...

Hong Kong fines Goldman Sachs $350 million over 1MDB scandal

Goldman Sachs ignored multiple red flags over the multibillion-dollar fundraisings it arranged for state fund 1Malaysia Development Berhad, Hong Kong’s financial regulator said on...

Subscribe For More

Get our daily notification on the latest financial crimes news around the World


Latest News

This Week

Brother of ex-Pakistan PM Nawaz Sharif jailed for money laundering

Pakistan Muslim League-Nawaz (PML-N) chief and Opposition Leader in the National Assembly Shehbaz Sharif was sent to jail on Tuesday in a money laundering...

UK regulators fine Goldman Sachs £97 million over 1MDB scandal

Goldman Sachs International has been fined £96.6m by UK regulators for risk management failures connected to the 1MDB scandal. The Financial Conduct Authority and Prudential...

Operators of fake theology school accused of stealing $12 million in student aid

Six people from three states are charged with defrauding $12 million from federal student aid programs by allegedly enrolling students into a theology school...

Julius Baer to deny two former CEOs their bonuses over money laundering scandal

Julius Baer will withhold millions of francs in bonuses from its former chief executives Boris Collardi and Bernhard Hodler, as a result of a...

Adblock Detected!

Our website is made possible by displaying online advertisements to our visitors. Please consider supporting us by whitelisting our website.

Enable Notifications    Ok No thanks