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Subpoena for NCR after whistleblower allegations

In an earnings call Thursday, Gavin Bell, the vice president of investor relations for Atlanta-based NCR, revealed more details about investigations of potential FCPA violations in China, the Middle East, and Africa.

He said following whistleblower allegations first disclosed in August, the company received a subpoena from the SEC. It’s also being investigated by the DOJ and the Treasury’s Office of Foreign Assets Control, which administers U.S. trade sanctions and export rules.

NCR makes ATM machines and self service kiosks for the retail, hospitality, travel, gaming, and entertainment industries.

According to an August report by the Wall Street Journal, NCR managers complained about a Dutch in-house lawyer who opposed sales practices that might have violated the FCPA and eventually replaced him with a Chinese lawyer.

NCR responded in an SEC filing in September, questioning the motives of the source behind the WSJ’s report and the accuracy of the complaints.

NCR’s Bell on Thursday backed off attacks on the unidentified whistleblower. He said the company now wants ‘to refute those allegations that are untrue and to take appropriate remedial action with respect to allegations that may be true.’

It’s the first indication from NCR that its internal investigation might reveal compliance problems.

*     *     *

Here’s Gavin Bell’s full statement from Thursday’s call about the investigation:

I wanted to update you with respect to the company’s internal investigation of the anonymous allegations of a purported whistleblower, as previously disclosed in our Form 8-K filed on August 14, 2012. Together with our outside counsel, we are making good progress towards completing our internal investigation in a thorough and expeditious manner. The goal of the investigation is to refute those allegations that are untrue and to take appropriate remedial action with respect to allegations that may be true. The company is cooperating fully with the authorities with respect to this matter, including with the Office of Foreign Assets Control; the Securities and Exchange Commission, which is investigating and has served a subpoena on the company; and the United States Attorney’s Office for the Northern District of Georgia, through which the company has voluntarily provided requested copies of the whistleblower communications.

In addition, the Board of Directors has received a demand letter from an individual shareholder demanding that the board investigate and take appropriate action in connection with certain of the whistleblower allegations. The board has formed a special committee to investigate and respond to the demand. Given that our investigation is ongoing, we will have no further comment on this matter during the earnings call.

And here’s what NCR said in its Form 8-K filed with the SEC on September 7:

On August 14, 2012 we disclosed in a Current Report on Form 8-K that we had received anonymous allegations from a purported whistleblower regarding certain aspects of the Company’s business practices in China, the Middle East and Africa, including allegations which, if true, might constitute violations of the Foreign Corrupt Practices Act. We have certain concerns about the motivation of the purported whistleblower and the accuracy of the allegations we received, some of which appear to be untrue. We take all allegations of this sort seriously and promptly retained experienced outside counsel and began an internal investigation that is ongoing. We do not comment on ongoing internal investigations.

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Research courtesy of the members area of the FCPA Blog.

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