The U.S. Justice Department is investigating whether an information technology solutions provider, Carahsoft Technology, and software companies collaborated to overcharge government agencies, according to reports. Germany's SAP and ServiceNow stock were among companies trading down early Wednesday.
According to a Bloomberg report citing federal court records, the civil investigation began in 2022 and is looking into government deals going back a decade.
On the stock market today, NY-listed shares in SAP fell 2.4% to 225.30. ServiceNow stock retreated 2.8% to near 898.
Civil Probe Targets Software Sales
The DOJ investigation reportedly involves sales to the U.S. military and other government entities.
At Piper Sandler, analyst Rob Owens said in a report: "Given Carahsoft is one of the largest IT solution providers to the U.S. government and the timing of the raid is very close to the end of the federal fiscal year, we believe this has the potential to disrupt deals in the pipeline. Based on our analysis of publicly disclosed federal contracts, we note that ServiceNow and Okta have the highest portion of federal contract dollars sourced through Carahsoft in our coverage."
Meanwhile, Okta stock fell 1% to near 75.
Also, the DOJ is also examining the role of a unit of Accenture, reports said. Accenture stock dipped a fraction on Wednesday.
ServiceNow's software tracks and manages services provided by information-technology departments. Also, its self-service tech portal enables company employees to access administrative and workflow tools.
Earlier this year the German software maker agreed to pay about $222 million to resolve investigations into bribery schemes in seven countries, said a Reuters report.
Meanwhile, SAP stock has gained 49% in2024. ServiceNow stock was up 30%.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
