Microsoft Acknowledges Ongoing FCPA Issues in Quarterly Report
Microsoft's 10-Q filing with the SEC offers no further details on the probes in question, though at least a portion of the inquiries are likely related to activities in Hungary that date back to 2013.
April 30, 2019 at 04:40 PM
3 minute read
Microsoft Corp. disclosed in its latest quarterly report with the U.S. Securities and Exchange Commission that it has “been cooperating with authorities in the U.S. in connection with reports concerning our compliance with the Foreign Corrupt Practices Act in various countries.”
While the disclosure renewed interest in the company's FCPA issues, the same language has appeared in Microsoft's financial filings for the past several years, according to Alex Fidler, a spokeswoman for the company.
She said Microsoft typically does not comment on ongoing investigations and its April 24 10-Q filing with the SEC offers no further details on the probes in question, though at least a portion of the inquiries are likely related to activities in Hungary that date back to 2013.
In August, The Wall Street Journal reported that U.S. authorities were investigating Microsoft “over potential bribery and corruption related to software sales in Hungary.” At the time, Microsoft's corporate vice president and deputy general counsel, David Howard, stated that the company had launched an internal investigation after learning of “potential wrongdoing” related to its operations in Hungary in 2014.
Citing “people familiar with the matter,” the WSJ reported that the “Justice Department and the Securities and Exchange Commission are probing how Microsoft sold software such as Word and Excel to middleman firms in Hungary that then sold those products to government agencies there in 2013 and 2014.”
In its latest quarterly report, Microsoft noted that it devotes “substantial resources to our global compliance programs and have implemented policies, training, and internal controls designed to reduce the risk of corrupt payments and collusive activity, our employees, vendors, or agents may violate our policies.”
But those efforts aren't always enough, as Howard acknowledged in a 2017 blog post in which he described compliance as “an area that we have to approach with more than a small dose of humility.”
“We're a global company with more than 120,000 employees in more than 190 countries. With our size and scope, we can't achieve a perfect score on compliance; we're going to have our share of issues, small and sometimes unfortunately not so small,” Howard wrote.
He added, “For instance, we've previously disclosed publicly that we have been responding to U.S. inquiries in connection with the Foreign Corrupt Practices Act.”
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