According to government agencies, WPP has been fined $ 19 million by the Securities and Exchange Commission (SEC) for violating anti-bidding, books, records, and the Foreign Corrupt Practices Act (FCPA) internal accounting rules. I did.
according to Press releaseThe SEC found that the holding company “implemented an aggressive business growth strategy” could not ensure that local advertising agencies in “risk markets” met accounting standards. ..
“This order does not ensure that these subsidiaries implement WPP’s internal accounting controls and compliance policies, and instead allows the founders and CEOs of the acquired entities to exercise broad autonomy and great influence. Now, “said the press release.
The SEC further details that WPP “has failed to respond promptly or appropriately to repeated corruption warning signs or control failures at certain subsidiaries.”
In India, for example, a WPP subsidiary repeatedly bribed government officials in return for advertising contracts. WPP was unable to respond to the issue after receiving several anonymous complaints. The SEC has discovered other “scheme and internal accounting deficiencies” related to WPP subsidiaries in China, Brazil and Peru.
“Companies cannot be allowed to focus on profitability or market share at the expense of proper management,” Charles Cain, SEC’s FCPA unit chief, said in a statement. “In addition, it is imperative for businesses to identify the root cause of the problem when a warning signal occurs to prevent the pattern of corrupt behavior from becoming established.”
WPP has agreed to stop executing the breach and pay a $ 19 million fine. This includes $ 10.1 million injustice, $ 1.1 million prejudiced interest, and a $ 8 million fine.
However, the holding company refused to accept or deny the SEC’s findings.
“The Commission’s findings are related to control issues and the acquisition and consolidation of companies in high-risk markets by 2018,” a WPP spokeswoman said in a statement. “As the Commission’s order allows, WPP’s new leadership will introduce strong new compliance measures and controls, radically change the approach to acquisitions, work fully with the Commission and commit fraud. Ended the people involved. “
A WPP spokesperson did not reveal the names of the dismissed people, but said they were directly involved in the acquisitions involved. He emphasized that the issue preceded CEO Mark Read and WPP’s current leadership team, and the company has an internal audit and compliance team to “ensure robust procedures and controls in the future.” Said that he had appointed an additional 36 people.
The SEC investigation was conducted by Samantha Martin and Laura Bennett and supervised by David Reece and Charles Cain. The Securities and Exchange Commission of India and Comissão de Valores Mobilários of Brazil participated in the survey.
WPP has been fined $ 19 million by the SEC for accounting and bribery claims
Source link WPP has been fined $ 19 million by the SEC for accounting and bribery claims