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Qualcomm settles US anti-corruption probe into its China activities


  • $7.5m fine to settle SEC investigation
  • SEC catalogued a series of alleged wrong-doings
  • Settlement follows the $975m fine paid to China last year

US wireless technology company Qualcomm has resolved yet another official investigation, the latest in a string of government-led probes stretching from the US via Europe to Asia. The company announced last night that it has entered into a settlement with the US Securities and Exchange Commission (SEC) with respect to its Foreign Corrupt Practices Act (FCPA) investigation. Without admitting or denying the SEC’s findings, Qualcomm has agreed to pay a civil penalty of $7.5 million to resolve the matter, which relates to its Chinese activities.

The SEC says its investigation found that Qualcomm violated the FCPA "by hiring relatives of Chinese government officials deciding whether to select the company’s mobile technology products." It also accused Qualcomm of providing "gifts, travel, and entertainment to try to influence officials at government-owned telecom companies in China," and of misrepresenting in its financial records "that the things of value provided to foreign officials were legitimate business expenses."

There’s a long list of violations on the SEC’s website, including the discovery that a Qualcomm executive personally provided the son of an unnamed Chinese official with a $70,000 loan to buy a home. “I think we’re operating under a different paradigm here,” it quote a Qualcomm human resources manager as saying.

“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,” said Michele Wein Layne, Director of the SEC’s Los Angeles Regional Office, who led the investigation.

So, money talks, Qualcomm paid a fine and can now walk away from the whole unpleasant business. And that should be the end of the matter, as the US Department of Justice has already closed its investigation of the case without taking any further action.

“Qualcomm is pleased to have put this matter behind us,” said Don Rosenberg, EVP and General Counsel of Qualcomm. “We remain committed to ethical conduct and compliance with all laws and regulations, and will continue to be vigilant about FCPA compliance.”

Last February, Qualcomm agreed to pay a fine of $975 million to end an antitrust probe in China after a 14-month government investigation into anti-competitive practices. It remains the largest fine in China's corporate history, although it could have been even higher. It also had to lower its royalty rates on patents used in China by local smaryphone companies.

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