Juniper Networks paid the SEC $11.7 million Thursday to settle FCPA offenses related to its sales practices in Russia and China.
The American technology company disgorged $4 million and paid a $6.5 million penalty to the SEC, plus pre-judgment interest of $1.3 million.
Juniper first disclosed the FCPA-related investigation in an SEC filing in August 2013.
In an internal administrative order (pdf), the SEC charged Juniper with violating the FCPA’s books and records and internal accounting controls provisions.
Juniper said earlier that in late 2017 the DOJ notified it “that the DOJ has closed its investigation related to these matters without taking any action” against the company.
From 2008 through 2013, sales employees of the Russian Juniper subsidiary, JNN Development Corp. (JNN), secretly agreed with third party partners to increase the discount on sales without passing those discounts on to customers. The off-book funds were referred to as “common funds” and were directed partially by JNN sales reps.
Use of the “common funds” included travel for foreign officials to various locations where there were no Juniper facilities or industry conferences related to Juniper’s business, the SEC said.
Juniper learned of the “common funds,” which were against corporate policy, in late 2009. However, diverting funds and using them to pay travel expenses continued through 2013.
In China, from 2009 through 2013, sales employees of the company’s Chinese subsidiaries falsified trip and meeting agendas for customers, including public officials, that understated the real value of entertainment involved on the trips.
The China sales reps then submitted the falsified agendas to Juniper’s legal department for approval. Against Juniper’s travel policies, the legal department approved numerous trips without adequate review and after the events had taken place.
According to the SEC, Juniper cooperated by disclosing facts in a timely way and “voluntarily produced and translated documents” to the agency during the investigation.
Juniper also “provided the staff [SEC] presentations regarding its investigation.”
As part of its remedial action, Juniper instituted a compliance preview and required pre-approval of non-standard discounts. It also now requires pre-approval for third-party gifts, travel, and entertainment, channel partner marketing expenses, and some operating expenses in high risk markets.
Harry Cassin is the publisher and editor of the FCPA Blog.