Qualcomm hired relatives of Chinese officials to obtain business

Qualcomm has entered into a settlement with the SEC with respect to its Foreign Corrupt Practices Act (FCPA) investigation. While Qualcomm does not admit – not deny – to the SEC’s findings, the company has agreed to pay a civil penalty of USD 7.5 million to resolve this matter. According to the SEC, Qualcomm hired relatives of Chinese government officials who were deciding whether to select the company’s mobile technology products amid increasing competition in the international telecommunications market. An SEC investigation found that Qualcomm also provided gifts, travel, and entertainment to try to influence officials at government-owned telecom companies in China. With insufficient internal controls to detect improper payments, Qualcomm misrepresented in its books and records that the things of value provided to foreign officials were legitimate business expenses. “Companies must effectively design and implement internal controls across all business operations to prevent FCPA violations, including its hiring practices,” said Michele Wein Layne, Director of the SEC’s Los Angeles Regional Office. “For more than a decade, Qualcomm went to extraordinary lengths to gain a business advantage with foreign officials deciding between Qualcomm’s technology and its competitors.”