Qualcomm share price up as electronics company fined $7.5m by US authorities for allegedly hiring relatives of Chinese officials to gain business
Qualcomm has agreed to pay a penalty of $7.5m (£5.4m) to the US Securities and Exchange Commission (SEC) today to settle charges for hiring relatives of Chinese government officials to influence them to pick the company above its competitors.
According to the SEC, Qualcomm offered both full-time jobs and paid internships to officials' family members, flagging the candidates internally as "must place" or "special" hires, although the electronics company neither admits or denies the findings.
The SEC investigation also alleged that Qualcomm provided officials at government-owned companies in China with gifts, travel, and entertainment, and, thanks to a lack of safeguards, the items provided to officials were then represented in the company's accounts as legitimate business expenses.
"Companies must effectively design and implement internal controls across all business operations to prevent Foreign Corrupt Practices Act (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."
Don Rosenberg, executive vice president and general counsel of Qualcomm, added: "Qualcomm is pleased to have put this matter behind us. We remain committed to ethical conduct and compliance with all laws and regulations, and will continue to be vigilant about FCPA compliance."
Additionally, a statement released by the company revealed that it has since put in place further measures to greater scrutinise job candidates.
Today's settlement with the SEC is a civil, rather than criminal, matter.
Shares in Qualcomm were trading up 2.5 per cent at $52.60 shortly after 3pm New York time.