WPP Faces $19 Million Penalty after SEC Alleges Bribery Involvement
WPP Agrees to Pay $19 Million Over Anti-Bribery Charges
Global advertising giant WPP has agreed to pay over $19 million to the Securities and Exchange Commission (SEC) following allegations of violations of the Foreign Corrupt Practices Act (FCPA) during acquisitions in China, Brazil, and Peru.
The SEC's allegations are related to WPP's failure to maintain internal controls and compliance during these acquisitions, which were made in high-risk markets. The acquisitions were carried out by WPP itself.
The SEC's allegations imply that WPP may have failed to adequately supervise its subsidiaries during the acquisitions, potentially allowing significant autonomy and influence to the chief executives and founders of the acquired agencies.
The charges are in connection with WPP's acquisitions in high-risk markets, and the SEC's allegations suggest that these acquisitions may have been problematic. However, it is important to note that current accessible knowledge does not confirm any public record of WPP's violation of the FCPA or regulatory penalties imposed on them in those countries.
WPP has acknowledged the settlement and has agreed to take steps to improve its internal controls and compliance procedures. The company has stated that it is committed to maintaining the highest standards of ethical and legal conduct in all its operations.
This is not the first time WPP has faced regulatory scrutiny. In 2018, the company reached a settlement with the Department of Justice and the SEC over allegations of improper accounting in connection with the 2015 acquisition of a digital marketing company.
The SEC's allegations are additional charges related to WPP's ongoing anti-bribery case. The acquisitions in question were made in China, Brazil, and Peru, and the SEC has alleged that WPP violated the FCPA during these acquisitions.
The payment is in relation to these anti-bribery charges, and WPP has agreed to pay over $19 million to the SEC to resolve these matters. The company has neither admitted nor denied the SEC's findings, but has agreed to settle the matter to avoid further legal proceedings.
This development comes at a time when WPP is undergoing a major restructuring, with the aim of becoming a more streamlined and efficient business. The company has been divesting non-core assets and has announced plans to cut thousands of jobs.
Despite these challenges, WPP remains one of the world's largest advertising companies, with a client roster that includes some of the biggest brands in the world. The company will no doubt be hoping to put this matter behind it and focus on its ongoing restructuring and growth plans.
Finance experts are warning that the $19 million payment by WPP could indicate a larger risk in the general-news sector. With this payment related to anti-bribery charges and connected to WPP's acquisitions in high-risk markets, crime-and-justice analysts are advising businesses to be more vigilant with their strategies in such regions.
