By Kathy Chu and Don Clark
Cisco Systems Inc. is investigating whether some of its
activities in Russia and nearby countries may have violated a U.S.
law that bans bribes to foreign officials.
The probe was discussed by the company in a blog post in
December and a public filing in February but attracted little
attention.
Cisco, a large maker of networking equipment, in the filing said
the investigation began at the request of the U.S. Securities and
Exchange Commission and Justice Department. The company and U.S.
regulators received allegations that business activities of some of
its operations and resellers in Russia and the Commonwealth of
Independent States violated the U.S. Foreign Corrupt Practices Act
of 1977, Cisco said.
The company, in the filing, said it takes the allegations "very
seriously and is fully cooperating" with U.S. regulators. A company
spokesman declined further comment Thursday.
Cisco discussed the investigation in a Dec. 23, 2013, blog about
business ethics posted on its website by Roxane Marenberg, a vice
president in its compliance systems division.
Ms. Marenberg, at the time, said the company had found "no basis
to believe that Cisco's activities are in violation of any law, and
indeed the information we were provided does not allege wrongdoing
by any of Cisco's executive management."
Ms. Marenberg's disclosure was also reported on a Feb. 14 blog
post by FCPA Professor, a website devoted to the Foreign Corrupt
Practices Act.
Cisco, in the SEC filing, said it doesn't expect the
investigation to have a "material adverse" impact on its finances,
as the countries that are the focus of the bribery investigation
make up less than 2% of its revenue.
In the latest quarter ended Jan. 25, Cisco's revenue dropped
7.8% to $11.2 billion. Profits dropped 55% to $1.43 billion, or 27
cents a share, from a year earlier, due to a $655 million charge to
cover the costs of addressing the memory-chip problem.
Write to Kathy Chu at kathy.chu@wsj.com and Don Clark at
don.clark@wsj.com
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