V&E Helps Secure Favorable FCPA Settlement For Juniper Networks
On August 29, 2019, the Securities & Exchange Commission (“SEC”) announced a settlement with Juniper Networks settling various investigations involving the Silicon Valley technology company. Under the settlement, Juniper—without having to admit culpability—agreed to pay $11.7 million in disgorgement, fines and interest to the government relating to alleged record keeping violations. Coupled with an earlier decision by the U.S. Justice Department that it would decline to bring any criminal or civil charges against Juniper, this resolution fully wraps up a six-year investigation and negotiation about the operations of certain subsidiaries in Russia, China and elsewhere.
A multi-office team of Vinson & Elkins represented Juniper’s Audit Committee made up of outside board directors. The independent review was announced by Juniper in its public filings in 2013. The initial inquiry related to marketing activities and travel in Russia based on potential violations of the Foreign Corrupt Practices Act.
The inquiry then spread to marketing activities in China based on whistleblower allegations. According to the SEC’s order, certain employees of the Russian subsidiary agreed with third party distributors to fund leisure trips for customers through use of off book accounts. The order further asserts that certain employees of the Chinese subsidiaries falsified trip and meeting agendas for customer events to understate the amount of entertainment involved in the trip.
The SEC made no allegations of bribery, only books and records and controls violations, and as noted, Juniper was not required to admit or deny culpability as part of the resolution. Meanwhile, a previously active DOJ investigation closed without any criminal or civil actions being undertaken against the company or its employees.
One of the key reasons why such a favorable resolution was reached was the extensive cooperation and remedial measures undertaken by the company under the direction of the Audit Committee, advised by V&E. The government specifically cited this cooperation and remediation in announcing the settlement. Even though the company did not self disclose before V&E was involved, Juniper’s cooperation along with the enhancement of its controls were important demonstrations of the company’s commitment to having an effective compliance program.
Numerous V&E lawyers were involved in the matter, particularly in San Francisco, Washington and New York.
“This is a great example of how the talented attorneys in offices across the firm came together to represent the interests of an important Silicon Valley client dealing with sensitive issues of global importance to the company,” said Matt Jacobs, a San Francisco-based V&E partner who represented the Audit Committee.
The V&E Government Investigations team representing the Audit Committee was led by partners Matt Jacobs, Jessica Heim, Clifford Thau, Amy Riella and Michael Charlson, counsel Marisa Antos-Fallon and senior associate Jessica Spradling Kelman.
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