Last week the SEC announced a settlement of a FCPA enforcement action against Qualcomm, primarily for its hiring of sons and daughters of officials at Chinese state owned enterprises. The company paid a fine and penalty of $7.5MM. To make these illegal employment offers, Qualcomm widely varied from its standard hiring protocols to hire the sons and daughters of officials of a state owned enterprise in China. Consider these business justifications for hiring a daughter of an official, as set out in the SEC Cease and Desist Order that the company not only received the request to hire a daughter and son of foreign officials directly from the foreign officials who held business opportunities for the company, but that the company also put in writing how such hires would facilitate doing business with the state owned enterprises in China. Yet in addition to the hirings—which were made in an effort to obtain business—one company business unit (EVP) made a personal loan of $70,000 to the Princeling to purchase a home.
