AKAMAI TECHNOLOGIES, INC.

Industry

Technology / Software / Electronics

Corporate Headquarters

Cambridge, Massachusetts, United States

Summary of Allegations:

Nationality of Foreign Officials: China

Summary of Allegations:

From 2013 to 2015, an employee of Akamai (Beijing) Technologies, Co. Ltd. ("Akamai China"), Chinese subsidiary of Akamai Technologies, Inc. ("Akamai"), allegedly schemed with a third party to allegedly pay cash bribes of approximately USD 38,500 and other expensive gifts to employees of Chinese state-owned entities to obtain and retain business contracts.  The bribes were allegedly paid to induce the Chinese state-owned entities to contract to purchase up to 100 times more services than they actually needed.

In addition, during the same period, employees of Akamai-China allegedly routinely provided improper gifts and entertainment, totaling approximately USD 32,000, to employees of Chinese state-owned entities.  Akamai China allegedly improperly recorded the bribes as legitimate business expense.

The bribe payments were provided in violation of Akamai's corporate governance and internal accounting controls policies.

Approximate Alleged Payments to Foreign Officials: USD 70,500

Business Advantage Allegedly Obtained: government contract

Enforcement Results

Agencies: Internal Investigation

Results: Deferred Prosecution Agreement

Year Resolved: 2016

Compliance Monitor:

Ongoing: No

Details:

In its SEC Form 10-Q filed on 2 March 2015, Akamai announced that the company is conducting an internal investigation, with the assistance of outside counsel, relating to sales practice in a country outside the United States that represented less than 1% of its revenue in each of the years ended 31 December 2014, 2013 and 2012.  The internal investigation includes a review of compliance with the requirements of the U.S. Foreign Corrupt Practices Act ("FCPA") and other applicable laws and regulations by employees in that market. 

In its SEC Form 10-K filed on 31 December 2016, Akamai announced that the internal investigation had been completed with the assistance of outside counsel. 

Agencies: United States: Department of Justice

Results: No Action

Year Resolved: 2016

Compliance Monitor:

Ongoing: No

Details:

In its SEC Form 10-Q filed on 2 March 2015, Akamai announced that the company voluntarily contacted the U.S. Department of Justice ("DOJ") in February 2015 to advise the agency of their internal investigation.  

On 7 June 2016, the DOJ notified Akamai that the agency had closed its investigations.  Akamai's prompt voluntary self-disclosure and cooperation was noted as the basis for the DOJ's decision not to prosecute.  

Agencies: United States: Securities and Exchange Commission

Results: Disgorgement, Non-Prosecution Agreement

Year Resolved: 2016

Compliance Monitor:

Ongoing: No

Details:

In its SEC Form 10-Q filed on 2 March 2015, Akamai announced that the company voluntarily contacted the U.S. Securities and Exchange Commission ("SEC") in February 2015 to advise them of their internal investigation.

On 7 June 2016, the SEC announced non-prosecution agreement ("NPA") with Akamai.  As part of the settlement, Akamai has agreed to pay USD 652,452 in disgorgement plus USD 19,433 in prejudgment interest. The NPA noted that Akamai is not charged with violations of the FCPA and would not pay additional monetary penalties.

The SEC further added that Akamai's self-report, extensive cooperation with the agency's investigation, prompt tightening of their internal controls, and swift remedial measures to eliminate the problems resulted in the NPA.

ENTITIES / INDIVIDUALS INVOLVED
  • Akamai Technologies, Inc. ("Akamai")
  • Akamai (Beijing) Technologies, Co. Ltd. (Akamai China)
Details Of How Conduct Was Discovered

Discovery Method: Voluntary Disclosure

Details:

In February 2015, Akamai voluntarily contacted the SEC and DOJ to advise both agencies of their internal investigation.

Country: China