The share price for Allot Communications Ltd. fell and an Israeli lawmaker called for an investigation of the firm.
Allot makes an item called Hod Hasharon that can monitor Internet traffic. Bloomberg reported last Friday that the gear was sold to Iran via a distributor in Denmark.
There have been periodic scandals in the last few years as others have been exposed selling gear to Iran that could help the regime track down dissidents by watching their cellphones and text messages. Nokia Siemens, a Finnish-German joint venture, has been the main target of such criticism.
Israeli law bans trade with Iran, but there have been numerous reports over the years of Israeli firms selling material clandestinely to Iran, including even equipment that can be used to make chemical weapons.
Allot Chief Executive Officer Rami Hadar told Bloomberg his firm’s agreement with the Danish distributor, RanTek A/S, said the company could only market its products in Denmark.
“We do not believe that any Allot employees were aware of RanTek selling outside of Denmark,” Hadar said. “But, if anyone was, we will take strong appropriate action.”
Three former sales employees for Allot told Bloomberg News it was well known inside the company that the equipment was headed to Iran.
The company said in a statement that it complies “fully with Israeli and non-Israeli laws, including all applicable export laws and regulations” and is “investigating the claims contained in the Bloomberg article.”
Nachman Shai, a member of the opposition Kadima Party, said in an interview he will ask the Foreign Affairs and Defense Committee of Israel’s parliament to follow up on the report that Allot’s product was sold to Iran.
Ira Hoffman, an attorney at Shulman Rogers Gandal Pordy & Ecker, P.A. in Potomac, Maryland, said the US could prohibit American companies and individuals from doing business with Allot if it found the company was complicit in shipments to Iran.
Bloomberg said the gear shipped to Iran, called NetEnforcer in English, can inspect pieces of data moving over a network. It can be used to eliminate spam or help network operators prioritize or block certain types of traffic.
Allot’s technology “is not designed for intrusive surveillance purposes,” the company said. “Our equipment lacks any capability to analyze or extract knowledge on the actual content of Internet traffic.”