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Washington DC, September 24, 2021 –
The Securities and Exchange Commission today announced that London-based WPP plc, the world’s largest advertising group, has agreed to pay more than $ 19 million to resolve charges of violating anti-corruption provisions, books and records and internal accounting controls of the Foreign Corrupt Practices Act (FCPA).
According to the SEC order, WPP implemented an aggressive business growth strategy that included acquiring controlling stakes in numerous advertising agencies located in high-risk markets. The ordinance finds that WPP did not ensure that these subsidiaries implement the internal accounting controls and compliance policies of WPP, instead allowing the founders and CEOs of the acquired entities to exercise a large degree of autonomy and inordinate influence. . The ordinance also finds that due to structural deficiencies, WPP did not react promptly or adequately to repeated warning signs of corruption or control failures in certain subsidiaries. For example, according to the ordinance, a subsidiary in India continued to bribe Indian government officials in exchange for advertising contracts even though WPP had received seven anonymous complaints about the conduct. The ordinance also documents other internal accounting control plans and gaps related to WPP’s subsidiaries in China, Brazil and Peru.
âA company cannot allow a focus on profitability or market share to come at the expense of proper controls,â said Charles Cain, FCPA unit head of the SEC. “In addition, it is essential for companies to identify the root cause of problems when red flags appear to prevent a corrupt behavior pattern from taking hold.”
Without admitting or denying the SEC’s findings, WPP agreed to cease and desist from committing violations of the FCPA’s anti-corruption provisions, books and records, and internal accounting controls and to pay $ 10.1 million. dollars in restitution, $ 1.1 million in prejudgment interest, and a fine of $ 8 million.
The SEC investigation was conducted by Samantha Martin and Laura Bennett. The investigation was overseen by David Reece and Charles Cain. The SEC appreciates the assistance of the Securities and Exchange Board of India and the ComissÃ£o de Valores MobilÃ¡rios of Brazil.