On March 1, 2016, the Securities and Exchange Commission (“SEC”) settled administrative charges against a popular telecommunications equipment supplier, Qualcomm Incorporated, under the Foreign Corrupt Practices Act (“FCPA”). According to the SEC, in addition to unlawfully providing meals, gifts and entertainment to foreign officials in an effort to win new business, Qualcomm also offered full-time employment and paid internships to family members and friends of foreign government officials in an effort to curry favor. In some cases, it appears these friends and family members would not have otherwise qualified for employment at Qualcomm and special accommodations were made to hire them. To settle the case, Qualcomm agreed to cease and desist from future violations, paid a $7.5 million civil monetary penalty and agreed to other heightened compliance measures.
Based on media reports, the SEC and Department of Justice are closely scrutinizing several other well-known companies for alleged FCPA violations based on similar employment patterns. In light of Qualcomm’s conduct, retailers and consumer product companies should review their current hiring practices and internal controls as they concern friends and family of foreign officials to ensure they are in full compliance with the FCPA.
Read the full SEC order.