Another princeling investigation has wrapped up at the Securities and Exchange Commission, although this one didn’t involve suspicions of violations of the Foreign Corrupt Practices Act by an investment bank. Instead, it was mobile technology company Qualcomm that paid $7.5 million to resolve the government probe into bribery of employees of state-owned enterprises in China.
Qualcomm settled allegations that it violated the FCPA by hiring relatives of Chinese government officials amid competition over the telecommunications market in China. The government officials were deciding whether to use Qualcomm’s mobile technology products. Qualcomm also provided gifts, travel and entertainment to influence the government officials.
The SEC order discussed various internal statements by Qualcomm employees concerning the importance of hiring the family members of the foreign officials for customer development. It also identified one individual hired for permanent employment despite an initial interview decision of “no hire”.
In addition to the bribery allegations, the SEC charged the company with both violations of the internal controls and books & records provisions of the FCPA.
This is the second FCPA internship case to be resolved over the past year. BNY Mellon settled the first in the financial industry last summer for a payment of nearly $15 million to the SEC. Investigations continue into several other companies, including JP Morgan and HSBC.
In a separate FCPA matter, the DOJ brought a criminal complaint today against a Miami-based subsidiary of Olympus, Olympus Latin America. According to the press release, the subsidiary and conspirators paid nearly $3 million to health care practitioners at government-owned health care facilities in Central and South America in order to receive more than $7.5 million in profits. The payments included cash, grants, personal travel and free or discounted equipment. The Deferred Prosecution Agreement required payment of a criminal penalty of $22.8 million.
We’ll post separately about the False Claims Act settlement by Olympus in the next few days. This case alleged the company paid kickbacks to doctors and hospitals in violation of the Anti-Kickback Statute. It was brought by the former chief compliance officer of Olympus Corp. of the Americas and resulted in $623.2 million in criminal and civil penalties. The whistleblower will receive approximately $51 million as a result of the federal and state lawsuits.
If you have questions about this information or want to speak to one of our FCPA whistleblower attorneys about reporting bribery of a government official through the SEC whistleblower law, please contact us via our online contact form.