SEC Non-Prosecution Agreement: Akamai Technologies, Inc.
Akamai Technologies agreed to a non-prosecution deal with the SEC after its China subsidiary paid $155,500 in bribes and $32,000 in improper gifts to Chinese officials between 2013–2015, falsely recorded as legitimate expenses due to weak internal controls, resulting in $671,885 in disgorgement and interest without criminal charges.
Akamai Technologies entered into a non-prosecution agreement with the SEC over violations of the Foreign Corrupt Practices Act’s books and records and internal controls provisions, stemming from bribes totaling $155,500—including $38,500 in cash—and $32,000 in improper gifts and entertainment made by its China subsidiary between 2013 and 2015. These illicit payments were falsely recorded as legitimate business expenses due to inadequate internal accounting controls, and the misconduct was uncovered by a whistleblower in late 2014. Akamai self-reported the violations, cooperated fully with the investigation, and agreed to disgorge $652,452 in ill-gotten gains plus $19,433 in prejudgment interest, totaling $671,885, without admitting guilt.
Akamai Technologies entered into a non-prosecution agreement with the SEC after its China subsidiary engaged in bribery schemes between 2013 and 2015, during which a regional sales manager and a channel partner paid approximately $155,500 in bribes—including $38,500 in cash—to Chinese government officials and employees of state-owned entities, along with $32,000 in improper gifts and entertainment. These payments were systematically falsified in Akamai’s books and records as legitimate business expenses due to deficient internal accounting controls, violating the Foreign Corrupt Practices Act. The misconduct was uncovered by a whistleblower in late 2014, prompting Akamai to self-report, terminate responsible employees, and implement comprehensive compliance reforms, including global training and enhanced internal controls. As part of the resolution, Akamai agreed to disgorge $652,452 in ill-gotten gains and pay $19,433 in prejudgment interest, totaling $671,885, without admission of guilt or criminal charges. The agreement requires full, ongoing cooperation with the SEC and any other regulatory proceedings, prohibits public statements contradicting the agreement, and binds any successor entity. Akamai must also obtain SEC approval before issuing any press release regarding the agreement and serve all correspondence to the SEC’s Boston office. The SEC emphasized that the non-prosecution deal does not exonerate Akamai from potential action by other regulators or prevent future enforcement if cooperation is breached.
Extracted insights
- $652K $652,452 $100K–$1M
- $156K $155,500 $100K–$1M
- $39K $38,500 $10K–$100K
- $32K $32,000 $10K–$100K
- $19K $19,433 $10K–$100K
- company akamai technologies, inc.
- agency sec and akamai technologies, inc.
- SEC and Akamai Technologies, Inc. enter into Non-Prosecution Agreement
- Akamai Technologies, Inc. agrees to cooperate Investigation
- Akamai Technologies, Inc. shall produce Non-Privileged Documents
- Akamai Technologies, Inc. shall secure Cooperation of Directors, Officers, and Employees
- Akamai Technologies, Inc. shall pay $652,452 Disgorgement
- Akamai Technologies, Inc. shall pay $19,433 Prejudgment Interest
UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
NON-PROSECUTION AGREEMENT
1. In connection with an investigation by the Division of Enforcement ("Division")
relating to possible violations of the books and records and internal accounting controls
provisions
of the Foreign Corrupt Practices Act from at least 2012 through 2015
("Investigation"), the United States Securities and Exchange Commission
("Commission") and Akamai Technologies, Inc. ("Respondent") enter into this non-
prosecution agreement
("Agreement") on the following terms and conditions:
COOPERATION
2. The Respondent, a corporation organized and operating under the laws of
Delaware agrees to cooperate fully and truthfully in the Investigation and any other
related enforcement litigation or proceeding to which the Commission is a party (the
"Proceedings"), regardless of the time period in which the cooperation is required. In
addition, the Respondent agrees to cooperate fully and truthfully, when directed by the
Division's staff, in an official investigation or proceeding by any federal, state,
or self-
regulatory organization
("Other Proceedings"). The full, truthful, and continuing
cooperation
of the Respondent shall include, but not be limited to:
a. producing, in a responsive and prompt manner, all non-privileged
documents, information, and other materials to the Commission as requested by the
Division's staff, wherever located, in the possession, custody,
or control of the
Respondent;
b. using its best efforts to secure the full, truthful, and continuing
cooperation, as defined in Paragraph 3,
of current and former directors, officers,
employees and agents, including making these persons available, when requested to do so
by the Division's staff, at its expense, for interviews and the provision
of testimony in the
investigation, trial and other judicial proceedings in connection with the Proceedings or
Other Proceedings; and
c. entering into tolling agreements, when requested to do so by the
Division's staff, during the period
of cooperation.
3. The full, truthful, and continuing
cooperation of each person described in
Paragraph 2 above will be subject to the procedures and protections of this paragraph,
and shall include, but not be limited to:
a. producing all non-privileged documents and other materials as requested
by the Division's staff;
b. appearing for interviews, at such times and places, as requested by the
Division's staff;
c. responding to all inquiries, when requested to do so by the Division's
staff, in connection with the Proceedings or
Other Proceedings; and
d. testifying at trial and other judicial proceedings, when requested to do so
by the Division's
staff,· in connection with the Proceedings or Other Proceedings.
UNDERTAKINGS
4. The Respondent understands and agrees to perform the following undertakings:
a. to pay disgorgement obtained or retained as a result of the violations
discovered during the Investigation, without reimbursement or indemnification from any
source, in the amount
of $652,452, together with prejudgment interest thereon in the
amount
of $19,433 within 15 days. Payment may be made directly from a bank account
via Pay.gov through the SEC website at htto://www.sec.gov/about/offices.ofm.htm.
Payment may also be made by certified check, bank cashier's check, or United States
postal money order payable to the Securities and Exchange Commission, which shall be
delivered or mailed to:
Enterprise Services Center
Accounts Receivable Branch
6500 South MacArthur Boulevard
Oklahoma City,
OK 73169
along with a letter identifying the Respondent and specifying that the payment is made
pursuant to a non-prosecution agreement entered into with the Commission
on June 7,
2016, and send an additional copy of the letter and check in accordance with the service
requirements
of Paragraph 7;
PUBLIC STATEMENTS
5. After this Agreement is executed, the Respondent agrees not to take any action or
to make or permit any public statement through present or future attorneys, employees,
agents, or other persons authorized to speak for it, except in legal proceedings in which
the Commission is not a party, denying, directly
or indirectly, the factual basis of any
aspect
of this Agreement. This paragraph is not intended to apply to any statement made
by an individual in the course
of any criminal, civil, or regulatory proceeding initiated by
the government or self-regulatory organization against such individual, unless such
individual is speaking on behalf
of the Respondent. If it is determined by the
Commission that a public statement by the Respondent or any related person contradicts
in whole or
in part this Agreement, at its sole discretion, the Commission may bring an
enforcement action in accordance with Paragraphs 8 through
10.
6. Prior to issuing a press release concerning this Agreement, the Respondent agrees
to have the text
of the release approved by the staff of the Division.
SERVICE
7. The Respondent agrees to serve by hand delivery or by next-day mail all written
notices and correspondence required by or related to this Agreement to Paul G. Block,
Assistant Regional Director, Foreign Corrupt Practices Act
Unit, United States Securities
and Exchange Commission, 33 Arch Street,
24th Floor, Boston, MA 02110, (617) 573-
8912, unless otherwise directed in writing by the staff
of the Division.
VIOLATION OF AGREEMENT
8. The Respondent understands and agrees that it shall be a violation of this
Agreement
if it knowingly provides false or misleading information or materials in
connection with the Proceedings or Other
·Proceedings. In the event of such misconduct,
the Division will advise the Commission
of the Respondent's misconduct and may make
a criminal referral for providing false information (18
U.S.C. § 1001), contempt (18
U.S.C. §§ 401-402) and/or obstructing justice (18 U.S.C. § 1503 et seq.).
9. The Respondent understands and agrees that it shall be a violation of this
agreement
if it violates the federal securities laws after entering into this agreement. It is
further understood and agreed that should the Division determine that
it has failed to
comply with any term
or condition of this Agreement, the Division will notify the
Respondent
or its counsel of the fact and provide an opportunity for the Respondent to
make a submission consistent with the procedures set
forth in the Securities Act of 1933
Release No.
5310. Under these circumstances, the Division may, in its sole discretion
and not subject to judicial review, recommend to the Commission an enforcement action
against the Respondent for any securities law violations, including, but not limited to, the
substantive offenses relating to the Investigation. Nothing in this agreement limits the
Division's discretion to recommend to the Commission an enforcement action against the
Respondent for future violations
of the federal securities laws, without notice, to protect
the public interest.
10. The Respondent understands that if it fails to make any payment by the date
agreed and/or in the amount agreed according to the schedule set forth above, all
outstanding payments under this Agreement, minus any payments made, shall become
due and payable immediately
at the discretion of the staff of the Commission.
11. The Respondent understands and agrees that in any future enforcement action
resulting from its violation
of the Agreement, any documents, statements, information,
testimony,
or evidence provided by it during the Proceedings or Other Proceedings, and
any leads derived there from, may be used against it in future legal proceedings.
12. The Respondent understands and agrees that any enforcement action brought by
the Commission following the Respondent's violation
of the Agreement that would not
have been time-barred by the applicable statute of limitations if brought on the date of the
execution
of this Agreement, may be commenced against the Respondent,
notwithstanding the expiration
of the statute of limitations between the signing of this
Agreement and the commencement
of such action.
13. In the event it breaches this Agreement, the Respondent agrees not to dispute,
contest, or contradict the factual statements contained in Exhibit A,
or their admissibility,
in any future Commission enforcement action against it.
COMPLIANCE WITH AGREEMENT
14. Subject to the full, truthful, and continuing cooperation of the Respondent, as
described in Paragraphs 2 and 3, and compliance with all obligations and undertakings in
the Agreement, the Commission agrees not to bring any enforcement action or
proceeding against the Respondent arising from the Investigation. This agreement should
not, however, be deemed exoneration
of the Respondent or to be construed as a finding
by the Commission that no violations
of the federal securities laws have occurred.
15. The Respondent understands and agrees that this Agreement does not bind other
federal, state or self-regulatory organizations, but the Commission may, at its discretion,
issue a letter to these organizations detailing the fact, manner, and extent
of its
cooperation during the Proceedings or
Other Proceedings, upon the written request of the
Respondent.
16. The Respondent understands and agrees that
if it sells, merges, or transfers all or
substantially all
of its business operations as they exist as of the date of this Agreement,
whether such a sale is structured as a stock or asset sale, merger,
or transfer during the
Deferred Period, it shall include in any contract for sale, merger, or transfer a provision
binding the purchaser
or successor in interest to the obligations set forth in this
Agreement. Furthermore, the protections arising from this Agreement will not apply to
purchasers
or successors in interest unless such purchaser or successor enters into a
written agreement, on terms acceptable to the Division, agreeing to assume all the
obligations set forth in this Agreement.
17. The Respondent understands and agrees that the Agreement only provides
protection against enforcement actions arising from the Investigation and does not relate
to any other violations or any individual or entity other than the Respondent.
VOLUNTARY AGREEMENT
18. The Respondent's decision to enter into this Agreement is freely and voluntarily
made and is not the result
of force, threats, assurances, promises, or representations other
than those contained in this Agreement.
19. The Respondent read and understands this Agreement. Furthermore, the
Respondent has reviewed all legal and factual aspects
of this matter with its attorney and
is fully satisfied with its attorney's legal representation. The Respondent has thoroughly
reviewed this Agreement with its attorney and has received satisfactory explanations
concerning each paragraph
of the Agreement. After conferring with its attorney and
considering all available alternatives, the Respondent has made a knowing decision to
enter into the Agreement.
20. The Respondent represents that its Board
of Directors has duly authorized, in the
resolution attached as Exhibit B, the execution and delivery
of this Agreement, and that
the person signing this Agreement has authority to bind the Respondent.
ENTIRETY
OF AGREEMENT
21. This Agreement constitutes the entire agreement between the Commission and the
Respondent, and supersedes all prior understandings,
if any, whether oral or written,
relating to the subject matter herein.
22. This Agreement cannot be modified except in writing, signed by the Respondent
and a representative
of the Commission.
23. In the event an ambiguity or a question
of intent or interpretation arises, this
Agreement shall be construed as
if drafted jointly by the parties hereto, and no
presumption
or burden of proof shall arise favoring or disfavoring the Commission or the
Respondent by virtue
of the authorship of any of the provisions of the Agreement.
[Remainder
of page intentionally left blank]
The signatories below acknowledge acceptance of the fore going terms and conditions.
RESPONDENT
Melanie Haratunian
Executive Vice
President, General Counsel
and Corporate Secretary
Akamai Technologies, Inc.
150 Broadway
Cambridge,
MA 02142
On jy) ~ , 3 , 2016, Melanie Haratunian, a person known to me, personally
appeared
b~;e me and acknowledged executing the fo regoing agreement with full authority to
do so on behalf of Akamai Technologies, Inc. as its General Counsel and pursuant to the attached
Resolution
of the Board of Directors.
C!an-1 C/. ~, eof0r~
Notary Public
State: /)Jass Cf c,,h_u ~tts
Commission number: /1/ J 4
CAROL A. N Cv1o"'""
Notary Pubffc
COIMlllWUlllj CF. tlllilMOllUll11'Td
My CommiNion Expirea
March 12, 2021 .
Commission expiration: --7J1ard ,(),
1
;;;.oz._ J
RESPONDENT'S COUNSEL
Approved as to form:
Ap: I 2 ~, 2.o/t:,
Date
RyanROh:
Kim Nemirow
Ropes & Gray LLP
(617) 951-7000
---
SECURITIES AND EXCHANGE COMMISSION
DIVISION
OF ENFORCEMENT
Date
Kara Novaco Brockmeyer
Unit Chief, Foreign Corrupt Practices Act Unit
EXHIBIT A
STATEMENT OF FACTS
If this case had gone to trial, the Secwities and Exchange Commission
("Commission") would have presented evidence sufficient to prove the following facts:
Akamai Technologies, Inc.
1. Akamai Technologies, Inc. (" Akamai" or "the company") is incorporated
in Delaware with its principal place
of business in Cambridge, Massachusetts. Akamai
provides cloud services for delivering, optimizing and
seeming online content and
business applications over the internet
("internet capacity and services") and maintains
operations
in North America, Europe, and China. Akamai's stock is registered pursuant
to Section l 2{b)
of the Securities Exchange Act of 1934 ("Exchange Act"), and it is listed
on the NASDAQ Global Select Market.
2. Akamai (Beijing) Technologies, Co. Ltd.
("Akamai-China") is a wholly-
owned subsidiary
of Akamai located in Beijing, China. Akamai-China provides technical
and sales support to its local Chinese channel partners for content delivery services,
which are resold by the channel partners in China.
Bribes Paid to Chinese Government Officials
3. Under China's regulatory system, Akamai-China is required to contract
with third-party channel partners to deliver its services to end customers. From
at least
2013 through 2015, an Akamai-China Regional Sales Manager (the "Regional Sales
Manager") schemed with an Akamai-China channel partner (the
"Channel Partner") to
bribe employees
of three end customers, two of which were Chinese state owned entities,
to obtain and retain business. The bribes were paid to induce the end customers'
employees, including the employees
of the Chinese state owned entities (hereinafter the
"Chinese government officials"), to contract to purchase up to I 00 times more network
capacity from the Channel
Partner than each company actually needed. The Channel
Partner would in turn purchase this capacity from Akamai-China, add its own markup,
and sell the capacity to the end customers.
4. To effectuate the scheme, the Channel
Partner paid monies to the Regional
Sales Manager's (or his nominees') accounts. The Regional Sales Manager then paid a
portion
of these funds, and also provided expensive gifts, to employees of the three end
customers. Overall, the Regional Sales Manager paid approximately
$155,500 to
employees
of end customers, including approximately $38,500 in cash to Chinese
government officials.
5. During the same time period, employees
of Akamai-China routinely
provided improper gifts and entertainment to employees
of its end customers, some of
whom were Chinese government officials, to obtain or retain business. The gifts and
entertainment given to Chinese government officials totaled approximately
$32,000 and
were provided in violation
of Akamai' s corporate governance and internal accounting
controls policies. Akamai-China improperly recorded the gifts and entertainment to
Chinese government officials as legitimate business expenses.
Akamai's Inadequate Internal Accounting Controls
and Inaccurate Books and Records
6. As evidenced by Akamai-China's improper payments to employees of end
customers, Akamai failed to devise and maintain a system
of internal accounting controls
at Akamai-China sufficient to provide reasonable assurances, among other things, that
transactions were executed in accordance with management's general
or specific
authorization and transactions were recorded as necessary to maintain accountability for
assets. Akamai' s internal accounting control failures included: the lack
of formalized due
diligence of China-based channel partners; the failure to proactively exercise audit rights
to ensure compliance with anti-bribery policies; failure to monitor
or review customer
usage in high-risk regions; failure to translate anti-bribery and anti-corruption policies
into Mandarin; inadequate employee training on compliance and anti-bribery policies;
and the lack
of effective procedures for reviewing and approving business entertainment.
Akamai's internal accounting control failures allowed Akamai-China's bribery scheme to
go undetected.
7. Akamai-China's books and records were inaccurate because Akamai-
China had made improper payments, in the form
of gifts and entertainment, which were
inaccurately recorded as legitimate business expenses. Akamai-China's books and
records were subsequently consolidated with Akamai's books and records, rendering
Akamai' s books and records inaccurate.
Akamai's Self-Report
8. Akamai promptly self-reported the misconduct to the Division of
Enforcement and conducted a timely and thorough investigation. Akamai discovered the
violations in late December
2014 when it received a complaint from an Akamai-China
sales representative alleging that the Regional Sales Manager had received improper
payments from channel partners and had made improper payments to end customer
employees to secure business. Within weeks, Akamai voluntarily disclosed its
investigation to the Commission staff and the Department
of Justice.
Remedial Measures and Cooperation
9. Akamai took immediate action to end the illicit payments and
implemented significant remedial measures. Shortly after being interviewed by Akamai,
the Regional Sales Manager involved in the misconduct was placed
on administrative
leave, and then later resigned in April
2015. Subsequently, the company also terminated
its relationship with the Channel Partner. Akamai also comprehensively reviewed its
then existing compliance program and undertook corrective action to enhance its
compliance program and ensure that its employees around the globe were receiving
adequate training. As part
of its remedial efforts, Akamai: (i) implemented
comprehensive due diligence processes for channel partners, including engaging
an
outside consultant to conduct channel partner risk assessments; (ii) strengthened its anti-
corruption policies; (iii) implemented enhanced compliance monitoring functions and
structures, such as naming a Chief Compliance Officer and staffing a global team
of
dedicated compliance professionals in Europe, the U.S., and Asia; (iv) provided extensive
mandatory in-person and on-line trainings on FCPA and anti-corruption policies to its
employees around the globe in appropriate languages; and (v) enhanced its travel and
expense control requirements in China, including requiring more detailed expense
descriptions and supporting documentation and appointing an independent function with
Chinese language capability to review and approve expense claims.
I
0. Akamai provided comprehensive, organized, and real-time cooperation
with the staff
of the Enforcement Division during the course of its internal investigation,
including: (i) sharing the detailed findings
of its internal investigation, including the
results
of its audits of its Chinese channel partners, analyses of customer usage versus
purchased capacities, summaries
of witness interviews, and factual chronologies and
supporting documentation; (ii) identifying and presenting relevant documents to the staff;
(iii) timely updating the staff with additional findings when its investigation uncovered
new information; (iv) proactively updating the staff
on its remedial measures, including
updates to its compliance policies and procedures; (v) voluntarily translating documents
from Chinese into English; and (vi) voluntarily making witnesses available for interviews
and testimony.
AKAMAI TECHNOLGIES, INC. CERTIFICATE OF CORPORA TE RESOLUTION
I, Melanie Haratunian, do he reby certify that I am the duly elected , qua lified and acting
Executive Vice
President, General Counsel and Corp orate Secretary of Akamai Technologies,
Inc.
("Akamai"), a Delaware corporat ion, and that the following is a complete and accurate copy
of a resolution adopted by the Board of Directors of Akama i (the " Board of Directors"), o r a duly
constituted committee thereof purs uant to authority delegated to it by the Board of Directors, by
unanimous written
consent effective as of May 3, 2016:
RESOLVED: That General Counsel of the Corporatio n, be and hereby is authorized to
act
on behalf of the Corporatio n, and in her sole di sc retion, to negotia te, approve, and
make the offer
of settlement of the Corporation, attache d here to , to the United States
Securiti
es and Excha nge Commission ("Commiss io n") in connection w ith the
investigatio n conducted by the Commiss ion; in this connectio n, the aforementio ned
Officer be and here by is authorized to unde rtake s uch actions as s he may deem necessary
a nd adv isable, including the execution
of s uch documentation as may be required by the
Commissio n, in orde r to
carry out the foregoing.
I fu rther ce
rtify that the aforesaid resolution has not been amended or revoked in a ny respect and
remains in
full force and effect.
JN WITNESS WHEREOF, I have executed this Certificate as a sealed instrume nt this 3rd day of
May, 2016.
~ ~ CAROL A. NfCOLORA
1& Notary Pub/le I
1.I, ~nt cw MASIAcHusms
I W1 My Comm;,.,,, e.p;,.,
March 12. 20
21
By
e lanie Haratunian
Executive
Vice President, General
Counsel and
Corpo rate Secretary
Akamai Technologies, Inc. UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
NON-PROSECUTION AGREEMENT
1. In connection with an investigation by the Division of Enforcement ("Division")
relating to possible violations of the books and records and internal accounting controls
provisions of the Foreign Corrupt Practices Act from at least 2012 through 2015
("Investigation"), the United States Securities and Exchange Commission
("Commission") and Akamai Technologies, Inc. ("Respondent") enter into this non
prosecution agreement ("Agreement") on the following terms and conditions:
COOPERATION
2. The Respondent, a corporation organized and operating under the laws of
Delaware agrees to cooperate fully and truthfully in the Investigation and any other
related enforcement litigation or proceeding to which the Commission is a party (the
"Proceedings"), regardless of the time period in which the cooperation is required. In
addition, the Respondent agrees to cooperate fully and truthfully, when directed by the
Division's staff, in an official investigation or proceeding by any federal, state, or self
regulatory organization ("Other Proceedings"). The full, truthful, and continuing
cooperation of the Respondent shall include, but not be limited to:
a. producing, in a responsive and prompt manner, all non-privileged
documents, information, and other materials to the Commission as requested by the
Division's staff, wherever located, in the possession, custody, or control of the
Respondent;
b. using its best efforts to secure the full, truthful, and continuing
cooperation, as defined in Paragraph 3, of current and former directors, officers,
employees and agents, including making these persons available, when requested to do so
by the Division's staff, at its expense, for interviews and the provision of testimony in the
investigation, trial and other judicial proceedings in connection with the Proceedings or
Other Proceedings; and
c. entering into tolling agreements, when requested to do so by the
Division's staff, during the period of cooperation.
3. The full, truthful, and continuing cooperation of each person described in
Paragraph 2 above will be subject to the procedures and protections of this paragraph,
and shall include, but not be limited to:
a. producing all non-privileged documents and other materials as requested
by the Division's staff;
b. appearing for interviews, at such times and places, as requested by the
Division's staff;
c. responding to all inquiries, when requested to do so by the Division's
staff, in connection with the Proceedings or Other Proceedings; and
d. testifying at trial and other judicial proceedings, when requested to do so
by the Division's staff,· in connection with the Proceedings or Other Proceedings.
UNDERTAKINGS
4. The Respondent understands and agrees to perform the following undertakings:
a. to pay disgorgement obtained or retained as a result of the violations
discovered during the Investigation, without reimbursement or indemnification from any
source, in the amount of $652,452, together with prejudgment interest thereon in the
amount of $19,433 within 15 days. Payment may be made directly from a bank account
via Pay.gov through the SEC website at htto://www.sec.gov/about/offices.ofm.htm.
Payment may also be made by certified check, bank cashier's check, or United States
postal money order payable to the Securities and Exchange Commission, which shall be
delivered or mailed to:
Enterprise Services Center
Accounts Receivable Branch
6500 South MacArthur Boulevard
Oklahoma City, OK 73169
along with a letter identifying the Respondent and specifying that the payment is made
pursuant to a non-prosecution agreement entered into with the Commission on June 7,
2016, and send an additional copy of the letter and check in accordance with the service
requirements of Paragraph 7;
PUBLIC STATEMENTS
5. After this Agreement is executed, the Respondent agrees not to take any action or
to make or permit any public statement through present or future attorneys, employees,
agents, or other persons authorized to speak for it, except in legal proceedings in which
the Commission is not a party, denying, directly or indirectly, the factual basis of any
aspect of this Agreement. This paragraph is not intended to apply to any statement made
by an individual in the course of any criminal, civil, or regulatory proceeding initiated by
the government or self-regulatory organization against such individual, unless such
individual is speaking on behalf of the Respondent. If it is determined by the
Commission that a public statement by the Respondent or any related person contradicts
in whole or in part this Agreement, at its sole discretion, the Commission may bring an
enforcement action in accordance with Paragraphs 8 through 10.
6. Prior to issuing a press release concerning this Agreement, the Respondent agrees
to have the text of the release approved by the staff of the Division.
SERVICE
7. The Respondent agrees to serve by hand delivery or by next-day mail all written
notices and correspondence required by or related to this Agreement to Paul G. Block,
Assistant Regional Director, Foreign Corrupt Practices Act Unit, United States Securities
and Exchange Commission, 33 Arch Street, 24th Floor, Boston, MA 02110, (617) 573-
8912, unless otherwise directed in writing by the staff of the Division.
VIOLATION OF AGREEMENT
8. The Respondent understands and agrees that it shall be a violation of this
Agreement if it knowingly provides false or misleading information or materials in
connection with the Proceedings or Other ·Proceedings. In the event of such misconduct,
the Division will advise the Commission of the Respondent's misconduct and may make
a criminal referral for providing false information (18 U.S.C. § 1001), contempt (18
U.S.C. §§ 401-402) and/or obstructing justice (18 U.S.C. § 1503 et seq.).
9. The Respondent understands and agrees that it shall be a violation of this
agreement if it violates the federal securities laws after entering into this agreement. It is
further understood and agreed that should the Division determine that it has failed to
comply with any term or condition of this Agreement, the Division will notify the
Respondent or its counsel of the fact and provide an opportunity for the Respondent to
make a submission consistent with the procedures set forth in the Securities Act of 1933
Release No. 5310. Under these circumstances, the Division may, in its sole discretion
and not subject to judicial review, recommend to the Commission an enforcement action
against the Respondent for any securities law violations, including, but not limited to, the
substantive offenses relating to the Investigation. Nothing in this agreement limits the
Division's discretion to recommend to the Commission an enforcement action against the
Respondent for future violations of the federal securities laws, without notice, to protect
the public interest.
10. The Respondent understands that if it fails to make any payment by the date
agreed and/or in the amount agreed according to the schedule set forth above, all
outstanding payments under this Agreement, minus any payments made, shall become
due and payable immediately at the discretion of the staff of the Commission.
11. The Respondent understands and agrees that in any future enforcement action
resulting from its violation of the Agreement, any documents, statements, information,
testimony, or evidence provided by it during the Proceedings or Other Proceedings, and
any leads derived there from, may be used against it in future legal proceedings.
12. The Respondent understands and agrees that any enforcement action brought by
the Commission following the Respondent's violation of the Agreement that would not
have been time-barred by the applicable statute of limitations if brought on the date of the
execution of this Agreement, may be commenced against the Respondent,
notwithstanding the expiration of the statute of limitations between the signing of this
Agreement and the commencement of such action.
13. In the event it breaches this Agreement, the Respondent agrees not to dispute,
contest, or contradict the factual statements contained in Exhibit A, or their admissibility,
in any future Commission enforcement action against it.
COMPLIANCE WITH AGREEMENT
14. Subject to the full, truthful, and continuing cooperation of the Respondent, as
described in Paragraphs 2 and 3, and compliance with all obligations and undertakings in
the Agreement, the Commission agrees not to bring any enforcement action or
proceeding against the Respondent arising from the Investigation. This agreement should
not, however, be deemed exoneration of the Respondent or to be construed as a finding
by the Commission that no violations of the federal securities laws have occurred.
15. The Respondent understands and agrees that this Agreement does not bind other
federal, state or self-regulatory organizations, but the Commission may, at its discretion,
issue a letter to these organizations detailing the fact, manner, and extent of its
cooperation during the Proceedings or Other Proceedings, upon the written request of the
Respondent.
16. The Respondent understands and agrees that if it sells, merges, or transfers all or
substantially all of its business operations as they exist as of the date of this Agreement,
whether such a sale is structured as a stock or asset sale, merger, or transfer during the
Deferred Period, it shall include in any contract for sale, merger, or transfer a provision
binding the purchaser or successor in interest to the obligations set forth in this
Agreement. Furthermore, the protections arising from this Agreement will not apply to
purchasers or successors in interest unless such purchaser or successor enters into a
written agreement, on terms acceptable to the Division, agreeing to assume all the
obligations set forth in this Agreement.
17. The Respondent understands and agrees that the Agreement only provides
protection against enforcement actions arising from the Investigation and does not relate
to any other violations or any individual or entity other than the Respondent.
VOLUNTARY AGREEMENT
18. The Respondent's decision to enter into this Agreement is freely and voluntarily
made and is not the result of force, threats, assurances, promises, or representations other
than those contained in this Agreement.
19. The Respondent read and understands this Agreement. Furthermore, the
Respondent has reviewed all legal and factual aspects of this matter with its attorney and
is fully satisfied with its attorney's legal representation. The Respondent has thoroughly
reviewed this Agreement with its attorney and has received satisfactory explanations
concerning each paragraph of the Agreement. After conferring with its attorney and
considering all available alternatives, the Respondent has made a knowing decision to
enter into the Agreement.
20. The Respondent represents that its Board of Directors has duly authorized, in the
resolution attached as Exhibit B, the execution and delivery of this Agreement, and that
the person signing this Agreement has authority to bind the Respondent.
ENTIRETY OF AGREEMENT
21. This Agreement constitutes the entire agreement between the Commission and the
Respondent, and supersedes all prior understandings, if any, whether oral or written,
relating to the subject matter herein.
22. This Agreement cannot be modified except in writing, signed by the Respondent
and a representative of the Commission.
23. In the event an ambiguity or a question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto, and no
presumption or burden of proof shall arise favoring or disfavoring the Commission or the
Respondent by virtue of the authorship of any of the provisions of the Agreement.
[Remainder of page intentionally left blank]
The signatories below acknowledge acceptance of the foregoing terms and conditions.
RESPONDENT
Melanie Haratunian
Executive Vice President, General Counsel
and Corporate Secretary
Akamai Technologies, Inc.
150 Broadway
Cambridge, MA 02142
On jy) ~ , 3 , 2016, Melanie Haratunian, a person known to me, personally
appeared b~;e me and acknowledged executing the foregoing agreement with full authority to
do so on behalf of Akamai Technologies, Inc. as its General Counsel and pursuant to the attached
Resolution of the Board of Directors.
C!an-1 C/. ~, eof0r~
Notary Public
State: /)Jass Cf c,,h_u ~tts
Commission number: /1/ J 4
CAROL A. N Cv1o"'""
Notary Pubffc
COIMlllWUlllj CF. tlllilMOllUll11'Td
My CommiNion Expirea
March 12, 2021 .
Commission expiration: --7J1ard ,(),
1
;;;.oz._ J
RESPONDENT'S COUNSEL
Approved as to form:
Ap: I 2 ~, 2.o/t:,
Date
RyanROh :
Kim Nemirow
Ropes & Gray LLP
(617) 951-7000
---
SECURITIES AND EXCHANGE COMMISSION
DIVISION OF ENFORCEMENT
Date Kara Novaco Brockmeyer
Unit Chief, Foreign Corrupt Practices Act Unit
EXHIBIT A
STATEMENT OF FACTS
If this case had gone to trial, the Secwities and Exchange Commission
("Commission") would have presented evidence sufficient to prove the following facts:
Akamai Technologies, Inc.
1. Akamai Technologies, Inc. (" Akamai" or "the company") is incorporated
in Delaware with its principal place of business in Cambridge, Massachusetts. Akamai
provides cloud services for delivering, optimizing and seeming online content and
business applications over the internet ("internet capacity and services") and maintains
operations in North America, Europe, and China. Akamai's stock is registered pursuant
to Section l 2{b) of the Securities Exchange Act of 1934 ("Exchange Act"), and it is listed
on the NASDAQ Global Select Market.
2. Akamai (Beijing) Technologies, Co. Ltd. ("Akamai-China") is a wholly-
owned subsidiary of Akamai located in Beijing, China. Akamai-China provides technical
and sales support to its local Chinese channel partners for content delivery services,
which are resold by the channel partners in China.
Bribes Paid to Chinese Government Officials
3. Under China's regulatory system, Akamai-China is required to contract
with third-party channel partners to deliver its services to end customers. From at least
2013 through 2015, an Akamai-China Regional Sales Manager (the "Regional Sales
Manager") schemed with an Akamai-China channel partner (the "Channel Partner") to
bribe employees of three end customers, two of which were Chinese state owned entities,
to obtain and retain business. The bribes were paid to induce the end customers'
employees, including the employees of the Chinese state owned entities (hereinafter the
"Chinese government officials"), to contract to purchase up to I 00 times more network
capacity from the Channel Partner than each company actually needed. The Channel
Partner would in turn purchase this capacity from Akamai-China, add its own markup,
and sell the capacity to the end customers.
4. To effectuate the scheme, the Channel Partner paid monies to the Regional
Sales Manager's (or his nominees') accounts. The Regional Sales Manager then paid a
portion of these funds, and also provided expensive gifts, to employees of the three end
customers. Overall, the Regional Sales Manager paid approximately $155,500 to
employees of end customers, including approximately $38,500 in cash to Chinese
government officials.
5. During the same time period, employees of Akamai-China routinely
provided improper gifts and entertainment to employees of its end customers, some of
whom were Chinese government officials, to obtain or retain business. The gifts and
entertainment given to Chinese government officials totaled approximately $32,000 and
were provided in violation of Akamai' s corporate governance and internal accounting
controls policies. Akamai-China improperly recorded the gifts and entertainment to
Chinese government officials as legitimate business expenses.
Akamai's Inadequate Internal Accounting Controls
and Inaccurate Books and Records
6. As evidenced by Akamai-China's improper payments to employees of end
customers, Akamai failed to devise and maintain a system of internal accounting controls
at Akamai-China sufficient to provide reasonable assurances, among other things, that
transactions were executed in accordance with management's general or specific
authorization and transactions were recorded as necessary to maintain accountability for
assets. Akamai' s internal accounting control failures included: the lack of formalized due
diligence of China-based channel partners; the failure to proactively exercise audit rights
to ensure compliance with anti-bribery policies; failure to monitor or review customer
usage in high-risk regions; failure to translate anti-bribery and anti-corruption policies
into Mandarin; inadequate employee training on compliance and anti-bribery policies;
and the lack of effective procedures for reviewing and approving business entertainment.
Akamai's internal accounting control failures allowed Akamai-China's bribery scheme to
go undetected.
7. Akamai-China's books and records were inaccurate because Akamai-
China had made improper payments, in the form of gifts and entertainment, which were
inaccurately recorded as legitimate business expenses. Akamai-China's books and
records were subsequently consolidated with Akamai's books and records, rendering
Akamai' s books and records inaccurate.
Akamai's Self-Report
8. Akamai promptly self-reported the misconduct to the Division of
Enforcement and conducted a timely and thorough investigation. Akamai discovered the
violations in late December 2014 when it received a complaint from an Akamai-China
sales representative alleging that the Regional Sales Manager had received improper
payments from channel partners and had made improper payments to end customer
employees to secure business. Within weeks, Akamai voluntarily disclosed its
investigation to the Commission staff and the Department of Justice.
Remedial Measures and Cooperation
9. Akamai took immediate action to end the illicit payments and
implemented significant remedial measures. Shortly after being interviewed by Akamai,
the Regional Sales Manager involved in the misconduct was placed on administrative
leave, and then later resigned in April 2015. Subsequently, the company also terminated
its relationship with the Channel Partner. Akamai also comprehensively reviewed its
then existing compliance program and undertook corrective action to enhance its
compliance program and ensure that its employees around the globe were receiving
adequate training. As part of its remedial efforts, Akamai: (i) implemented
comprehensive due diligence processes for channel partners, including engaging an
outside consultant to conduct channel partner risk assessments; (ii) strengthened its anti
corruption policies; (iii) implemented enhanced compliance monitoring functions and
structures, such as naming a Chief Compliance Officer and staffing a global team of
dedicated compliance professionals in Europe, the U.S., and Asia; (iv) provided extensive
mandatory in-person and on-line trainings on FCPA and anti-corruption policies to its
employees around the globe in appropriate languages; and (v) enhanced its travel and
expense control requirements in China, including requiring more detailed expense
descriptions and supporting documentation and appointing an independent function with
Chinese language capability to review and approve expense claims.
I 0. Akamai provided comprehensive, organized, and real-time cooperation
with the staff of the Enforcement Division during the course of its internal investigation,
including: (i) sharing the detailed findings of its internal investigation, including the
results of its audits of its Chinese channel partners, analyses of customer usage versus
purchased capacities, summaries of witness interviews, and factual chronologies and
supporting documentation; (ii) identifying and presenting relevant documents to the staff;
(iii) timely updating the staff with additional findings when its investigation uncovered
new information; (iv) proactively updating the staff on its remedial measures, including
updates to its compliance policies and procedures; (v) voluntarily translating documents
from Chinese into English; and (vi) voluntarily making witnesses available for interviews
and testimony.
AKAMAI TECHNOLGIES, INC. CERTIFICATE OF CORPORA TE RESOLUTION
I, Melanie Haratunian, do hereby certify that I am the duly elected, qualified and acting
Executive Vice President, General Counsel and Corporate Secretary of Akamai Technologies,
Inc. ("Akamai"), a Delaware corporation, and that the following is a complete and accurate copy
of a resolution adopted by the Board of Directors of Akamai (the "Board of Directors"), or a dul y
constituted committee thereof pursuant to authority delegated to it by the Board of Directors, by
unanimous written consent effective as of May 3, 20 16:
RESOLVED: That General Counsel of the Corporation, be and hereby is authorized to
act on behalf of the Corporation, and in her sole di scretion, to negotiate, approve, and
make the offer of settlement of the Corporation, attached hereto, to the United States
Securities and Exchange Commission ("Commission") in connection with the
investigation conducted by the Commiss ion; in this connection, the aforementioned
Officer be and hereby is authorized to undertake such actions as she may deem necessary
and advisable, including the execution of such documentation as may be required by the
Commission, in order to carry out the foregoing.
I further certify that the aforesaid resolution has not been amended or revoked in any respect and
remains in full force and effect.
JN WITNESS WHEREOF, I have executed this Certificate as a sealed instrument this 3rd day of
May, 2016.
~ ~ CAROL A. NfCOLORA 1& Notary Pub/le I
1.I, ~nt cw MASIAcHusms
I W1 My Comm;,.,,, e.p;,.,
March 12. 2021
By
e lanie Haratunian
Executive Vice President, General
Counse l and Corporate Secretary
Akamai Technologies, Inc.