In The Shadows: The Rise And Fall Of Torrey Point

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While sources say Arista wasted little time in de-authorizing Torrey Point in 2012, Juniper didn't take action until more than a year later. In fact, documents show that Juniper actually warned the solution provider about some of the allegations from former employees concerning Torrey Point's activities.

According to an email dated Dec. 2, 2011, that was part of the court filings, Juniper Senior Channel Account Manager Zachary Kilpatrick told Torrey Point executives, including Young, that several ex-employees were trying to undermine Torrey Point accounts with "a smear campaign," calling Torrey Point "a failing business" and advising customers to cease working with the solution provider.

"This is causing much grief both internally with the Juniper account teams, but also may serve to delay the deals and/or hamper Torrey Point's value and retention of these customers," Kilpatrick wrote.

Kilpatrick did not respond to requests for comment.

It's clear that the fast-growing Torrey Point was a highly valuable partner for Juniper. But it's also clear that several Juniper executives knew of the allegations regarding the Cisco sales in late 2011 and early 2012. If the rumors and allegations from former employees weren't enough, then Baker's lawsuit blew the roof off Torrey Point's double dealings. In fact, Kilpatrick and an unnamed "custodian of records" at Juniper were subpoenaed by Baker's attorneys in February 2012.

There were other warning signs for Juniper later on. According to various sources with direct knowledge of the matter, Juniper discovered discrepancies in product orders for some of Torrey Point's clients. In late 2012, one particular large client had ordered a number of new routers from the solution provider, and when Juniper followed up with the client after the delivery and integration of those routers, the vendor discovered that the number of routers ordered by the client was significantly less than what Torrey Point claimed.

While court documents contained no evidence that the missing products were sold to Cisco or another competitor, the discrepancy was enough for Juniper to take action. According to various sources, the vendor began reviewing Torrey Point's records and financial statements last year. That's when Juniper, upon discovering the web of affiliated companies and hidden sales, saw just how far Torrey Point had gone. But why did it take Juniper nearly a year before finally dropping Torrey Point?

One former Torrey Point employee with firsthand knowledge of the Juniper partnership said the vendor was extremely concerned about the situation and even hired an outside consultant to lead the forensic investigation into Torrey Point, which included extensive internal and external reviews of all related records and accounts. The employee, who wished to remain anonymous, said the process took as long as it did because Torrey Point was such a big partner and the vendor wanted to make sure it got the decision right. However, other sources CRN spoke with, who also have direct knowledge of the Torrey Point-Juniper relationship, said Juniper initially gave the solution provider a slap on the wrist for the Cisco sales in late 2011/early 2012 for two reasons. 
First, Torrey Point had become such a crucial revenue generator for the vendor. And second, because the practice of occasionally selling some products to the competition is a common transgression in the channel.

But the extent to which Torrey Point went to create and conceal an entire side business with Cisco was, in the end, a deal breaker.

NEXT: Seeing The Red Flags

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