Microsoft Under Probe Over Overseas Bribery

The U.S. Department of Justice and Securities and Exchange Commission are investigating Microsoft Corp.(NASDAQ:MSFT) on violations of the Foreign Corrupt Practices Act, it was revealed Tuesday.  

Microsoft said allegations of potential bribery by employees in China, Romania and Italy should be reviewed by the agencies and its own compliance unit, but declined to address the specifics of any cases.

The software company commented -- and did not deny the investigation -- after the Wall Street Journal reported that Justice and the SEC had launched investigations over tips from a former Microsoft employee that the company handed kickbacks to foreign officials in return for software contracts.

"The matters raised in the Wall Street Journal are important, and it is appropriate that both Microsoft and the government review them," wrote John Frank, a company vice president and deputy general counsel, in a blog post on the company's website.

"We take all allegations brought to our attention seriously and we cooperate fully in any government inquiries," he added, without confirming that the software company was aware of any investigation. “We cannot comment about ongoing inquiries,” he wrote.

The SEC declined immediate comment. A Justice Department spokesman said he could neither confirm nor deny the existence of an investigation.

Investigations of potential violations of the FCPA are fairly common among U.S. companies. Microsoft rival International Business Machines Corp. (NYSE:IBM) agreed in 2011 to pay $10 million to resolve SEC charges over improper gifts to government officials in South Korea and China, but is still waiting for a judge to sign off on the deal.

The China allegations spring from information passed by a former Microsoft employee to U.S. investigators last year, according to the Journal report, which cited an unnamed source it said was familiar with the matter. Microsoft hired outside lawyers to conduct a 10-month internal investigation which found no wrongdoing, the report said, citing unnamed people briefed on the investigation.

The Journal said the investigations are in the early stages and the government has not accused any party of wrongdoing.

Microsoft stock stood at $28.12 in after-hours trading Tuesday, little changed.