What’s Behind the Cisco Investigation in Russia?
Nearly three months after Cisco (NASDAQ:CSCO) noted its business practices in Russia were under investigation in a company blog post, the story is making national headlines. The Wall Street Journal reported Cisco disclosed the investigation in a Securities Exchange & Commision (SEC) filing in February, a response to a request by the U.S. Department of Justice and SEC to look into behavior that may violate the U.S. Foreign Corrupt Practices Act in Russia and its provinces.
During the early stages of the investigation, which Cisco said it was handling at the request of U.S. regulators, the VP of compliance systems for the network equipment maker said there was no indication of wrongdoing by its partners in Russia and the Commonwealth of Independent States. The company official opened the same blog post by mentioning Cisco was honored as one of the “World’s Most Ethical Companies” by the Ethisphere Institute for the sixth straight year. In paragraph four, she took up the topic of the allegations hanging over Cisco.
“Ethics and integrity are part of our DNA and ingrained in our culture and the way we conduct every aspect of our business,” wrote compliance officer Roxane Marenberg in December. “Our success in entirely dependent upon continued compliance with ethical business practices,” she added later in the post.
In terms of potential damage to the company, Marenberg wrote she believed the investigation would have “[no] material adverse effect” on Cisco’s business. According to the Wall Street Journal report, the company maintained that position in its February SEC filing.