On Thursday, Juniper Networks paid the U.S. Securities and Exchange Commission (SEC) $11.7 million to settle foreign bribery chargers related to its sales practices in China and Russia.
“Operating with the highest ethical standards is of the utmost importance for Juniper Networks, and we are committed to ensuring that we act with honesty and integrity consistently in everything we do,” a Juniper Networks spokeswoman said in a statement, according to a story by the Wall Street Journal.
In 2013, Juniper announced it was under investigation by both the SEC and the U.S. Department of Justice (DoJ) under the Foreign Corrupt Practices Act (FCPA), which bars U.S. companies from paying bribes to foreign officials in order to win contracts.
Early last year, Juniper said the DOJ had closed its investigation with out taking any action against it.
From 2008 to 2013, Juniper sales employees of its Russian subsidiary secretly agreed with third-party partners to increase discounts on sales that weren’t passed on to customers. Instead, the off-the-book fund, which was referred to as “common funds,” was used to pay for customer trips, including some for government officials, according to the SEC.
The common funds, which were partially directed by the subsidiary sales reps, were used to travel to locations where Juniper didn’t have any facilities or industry conferences related to its business, the SEC said.
Juniper became aware of the common funds in late 2009 but continued to divert funds that were used to pay travel expenses through 2013.
From 2009 to 2013, sales employees in Juniper’s two Chinese subsidiaries falsified trip and meeting agendas for customers, including public officials, which amounted to violations of the FCPA’s record keeping provisions and internal controls, according to the SEC.
Juniper started cooperating with the agency after learning of the government investigations, the SEC said. As part of the remedial action, Juniper strengthened its compliance program and created the position of chief compliance officer. Juniper now required pre-approval for third-party gifts, travel, entertainment and channel partner marketing expenses.