Extreme Networks ( NASDAQ: EXTR ) has disclosed information it has about a former employee working to sell company products to a U.S.-sanctioned company in Russia.
In an SEC filing , the company says that last week it was supplied with information from a news organization that helped it uncover the actions of a former employee.
The sanctioned company was an indirect customer of a network business that Extreme acquired in July 2017, it says.
It also learned that "DEMZ was a front business for MMZ Avangard, a subsidiary of a Russian military contractor." From 2018-2021, a Russian distributor ordered Extreme's products for partners who made orders on behalf of DEMZ, which then transferred the products to MMZ Avangard.
"The former employee continued to perpetuate this scheme upon going to work for the distributor after being terminated by Extreme for performance issues," Extreme says.
It amounts to a total of $645,000 in misappropriated product sales over five years, the company estimates, "less than 0.01% of the company's global revenue during that time period."
Extreme has notified regulators and is conducting an ongoing internal investigation, it says.
For further details see:
Extreme Networks learns of product supplied to sanctioned Russian company