Juniper pays $11.7m to make SEC bribery investigation go away

Networking vendor Juniper has never admitted or denied it participated in any activities related to bribery, though apparently its bank accounts were simply too full to continue.

The details of this investigation are complicated and nuanced, though the over-arching accusation is simple. The Securities and Exchange Commission accused Juniper of improperly reporting accounts and allowing a subsidiary to continue a practice which smells incredibly similar to bribery.

To conclude the investigation, Juniper has paid the SEC $11.7 million. This is not an admission of guilt from the firm apparently, it has apparently decided to reallocate $11.7 million because it is innocent and would not consider any form of bribery.

The fact that the government agency will stop a bribery investigation after receiving the funds is perhaps a pleasant after-effect.

While this would appear to be the end of the saga, there are some relatively suspect elements to consider. This extract from the ‘Cease and Desist’ document is an interesting one to ponder.

“From 2009 to 2013, local employees of Juniper China paid for the domestic travel and entertainment of customers, including foreign officials, that was excessive and inconsistent with Juniper policy. Certain local Juniper China marketing employees falsified agendas for trips provided to end-user customer employees. These falsified trip agendas understated the true amount of entertainment involved on the trips.”

Another interesting claim is the approval process. Juniper requires approval from its legal department to justify and validate such entertainment expenses, though marketing and sales employees sought approval after the events took place, painting the legal team into a corner.

The period in question took place between 2009 and 2013. It had been going on for an undisclosed period of time prior to 2009, though this was the time in which senior managers at Juniper were alerted to the practice.

At JNN Development Corp., a Russian subsidiary of the Juniper Group, secret discounts were discussed with third-party channel partners. These discounts were not passed onto customers, instead, funnelled into nefarious accounts. These funds were used to fuel corporate entertainment, much of which undermined the Juniper anti-bribery policies.

Managers were alerted to the presence of these funds, as well as the opaque practices and bread crumb trails which were left behind, in 2009. Some effort was made to discourage the practice, though the SEC deemed this was not sufficient, and the nefarious activities continued for another four years through to 2013.

“Juniper failed to accurately record the incremental discounts and travel and marketing expenses in its books and records and failed to devise and maintain a system of internal accounting controls sufficient to prevent and detect off-book accounts, unauthorized customer trips, falsified travel agendas and after-the-fact travel approvals,” the SEC has stated.

As with every slippery corporate firm around the world, Juniper will not admit fault, though apparently it had exactly $11.745018 million to ‘donate’ to the SEC to make the investigation go away.

Amazon China staff were reportedly selling-on user data

Amazon is conducting an internal investigation into allegations that its staff in China received bribes from merchants for user data.

According to a report by the Wall Street Journal, staff of the online retailing giant’s China operation received between $80 and more than $2,000 to part internal user and sales data to brokers, who would then re-sell them to merchants who do business on Amazon platform. According to the WSJ report, it was not only Amazon’s internal sales metrics and users’ email addresses that were sold, also on offer was additional services. The staff would help the buyers to delete negative reviews and to re-open banned Amazon accounts.

It is said the malpractice was particularly rampant in Amazon’s office in Shenzhen, the city bordering Hong Kong. It is not the first time China’s online retailers suffered from data security comprise. Back in 2016 over 20 million of Alibaba’s users had their data hacked. Nor is this the first time that Amazon has found itself in the centre of data leaking controversies, but earlier cases were related to its cloud service AWS. So it is astonishing that in the present case, data was not breached by hacking but through blatant criminal transactions. It is not clear how many users have had their data sold.

Amazon released a statement saying “We have zero tolerance for abuse of our systems and if we find bad actors who have engaged in this behaviour, we will take swift action against them, including terminating their selling accounts, deleting reviews, withholding funds, and taking legal action.”

Amazon set up its business in China in 2004 after acquiring a competing online bookshop Joyo with $75 million. It was rebranded Amazon China in 2011.