Qualcomm settled charges with the Securities and Exchange Commission in the U.S. that said it had hired relatives of officials in China who then could influence the mobile technology products selection in the competitive market.
The investigation by the SEC found as well that Qualcomm had allegedly provided entertainment, travel and gifts in an attempt to influence government officials at the telecom companies owned and operated by the government in China.
The SEC said that Qualcomm had misrepresented in its records and books that the things that had value that were provided to officials were legitimate expense of the business.
The chipmaker does not accept or deny the charges. However, it has agreed to pay a fine of $7.5 million to settle the SEC charges that it had violated the FCPA or Foreign Corrupt Practices Act.
Qualcomm said that this settlement related to conduct prior to 2012 and this action by the SEC was not criminal.
Qualcomm added that the Justice Department had recently closed an investigation of the same matters without any action being taken.
The charges brought against Qualcomm highlight challenges faced by companies in the U.S. in a number of markets where controls of the governments are strong and where bribing is an accepted practice.
Certain financial institutions face probes as well from the SEC on charges that were similar relating to how they operate in China.
It has been said that Qualcomm provided employment full time as well as paid internships to family members of officials with the goal of obtaining or keeping business across China.
For instance, Qualcomm obliged when one official asked employees to find her daughter an internship. The daughter was studying in the United States. An internal document said the company had received great help from the daughter’s mother.
In addition, the company was charged with giving a research grant of $75,000 to one university in the United States on behalf of a foreign official’s son so he could keep his position within its Ph.D program as well as have his student visa renewed.