This prior post went in-depth as to the recent $7.5 million Qualcomm Foreign Corrupt Practices Act enforcement action based on alleged improper hiring and other practices in China.
This post continues the analysis by highlighting various issues to consider.
Qualcomm’s FCPA scrutiny was, at least partially, related to September 2010 formal order of private investigation from the SEC that arose from a “whistleblower’s” allegations made in December 2009 to the audit committee of the Company’s Board of Directors and to the SEC. As Qualcomm previously disclosed, “the audit committee completed an internal review of the allegations with the assistance of independent counsel and independent forensic accountants. This internal review into the whistleblower’s allegations and related accounting practices did not identify any errors in the Company’s financial statements.”
More directly related to the FCPA scrutiny, according to Qualcomm’s previous disclosures: “On January 27, 2012, the Company learned that the U.S. Attorney’s Office for the Southern District of California/DOJ has begun a preliminary investigation regarding the Company’s compliance with the Foreign Corrupt Practices Act (FCPA), a topic about which the SEC is also inquiring.”
Thus, from start to finish Qualcomm’s FCPA scrutiny lasted between 4-6 years (depending on one’s interpretation of the above disclosures).
If the SEC wants the public to have confidence in its FCPA enforcement program, it must resolve instances of FCPA scrutiny much quicker. Whether its nearly 6 years or merely 4 years, this long time period is simply inexcusable.