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SEC v. Akamai Technologies, Inc.

 
:
Akamai Technologies, Inc.
:
SEC Civil
:
June 7, 2016
:
SEC v. Akamai Technologies, Inc.
:
SEC v. Akamai Technologies, Inc. (2016)
:
The DOJ separately declined to bring charges under the FCPA Pilot Program given the company’s self-disclosure, cooperation, and remediation.
:
Computer & Information Technologies-Software
:
China
:
2013; 2014; 2015
:
Unnamed Chinese foreign officials.
:
Akamai Technologies, Inc. is a Delaware corporation headquartered in Cambridge, Massachusetts, which provides cloud services for delivering, optimizing, and securing online content and business applications over the internet. Akamai maintains a class of stock registered on the NASDAQ Global Select Market.

According to the SEC, from at least 2013 until 2015, Akamai’s Chinese subsidiary, Akamai (Beijing) Technologies, Co. Ltd. (“Akamai-China”), bribed Chinese officials in exchange for sales contracts. Under Chinese regulations, Akamai-China was required to sell its services through the use of a local third-party channel partner. This meant that Akamai would sell its services to a local channel partner and the channel partner would in turn re-sell those services to an end user.

The SEC claims that Akamai-China’s Regional Sales Manager schemed with a particular channel partner to offer the employees of certain end users bribes in exchange for an agreement to purchase greater than necessary services from Akamai. Many of those end users were state-owned companies. The alleged bribes constituted cash, expensive gifts, and entertainment totaling approximately $187,000.

On June 7, 2016, the SEC announced that it had entered into a NPA with Akamai after it concluded that Akamai-China’s conduct violated the book-and-records and internal controls provisions of the FCPA. As part of the NPA, Akamai agreed to pay a total sanction of $671,885. The DOJ later publicly announced that it would decline to prosecute Akamai in accordance with the FCPA Pilot Program announced in April 2016 due to the company’s voluntary disclosure, cooperation, and remediation.
:
Books and records (Issuer), Internal controls (Issuer)
:
Non-prosecution Agreement
:
$652,452 in disgorgement plus pre-judgment interest of $19,433.
:
671,885
:
0
:
Issuer
:
U.S.
:
United States
:
Contract Procurement/Retention
:
Not stated.
:
Cash, Entertainment, Gifts
:
Not stated.
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China
:
No
:
Yes