OM12 Management Server Installation Fails: The user account <domain>\xyz cannot be verified. Please verify the domain, username, and password to continue.

Bumped into this issue while installing a second OM12 Management Server in a brand new OM12 MG:

This really puzzled me since the accounts being used (Action account and Data Access account) were really OK and the correct syntax was being used <domain>\<account>. And yet, setup kept on throwing that error.

Cause
Finally it turned out that security was tightened for the OM12 service accounts and the accounts were only limited to logon to a certain set of servers.

Solution
When the OM12 service accounts were modified in ADUC so these accounts were allowed to logon to the second OM12 Management Server as well, setup continued.