US SEC Settles Charge Against World's Largest Advertising Group

The US Securities and Exchange Commission (SEC) has settled charge against WPP plc, the world's largest advertising group for payout of $10.1 million in disgorgement, $1.1 million in prejudgment interest, and an $8 million penalty.

According to the announcement, WPP violated the anti-bribery, books and records, and internal accounting controls provisions of the Foreign Corrupt Practices Act (FCPA).

WPP implemented an aggressive business growth strategy that included acquiring majority interests in many localized advertising agencies in high-risk markets but failed to ensure that these subsidiaries implemented WPP's internal accounting controls and compliance policies.

In addition, the order also finds that, because of structural deficiencies, WPP failed to promptly or adequately respond to repeated warning signs of corruption or control failures at certain subsidiaries. The order also documents other schemes and internal accounting control deficiencies related to WPP's subsidiaries in China, Brazil, and Peru.

"A company cannot allow a focus on profitability or market share to come at the expense of appropriate controls," said Charles Cain, the SEC's FCPA Unit Chief. "Further, it is essential for companies to identify the root cause of problems when red flags emerge to prevent a pattern of corrupt behavior from taking hold."

This week, SEC awarded around $36 million to a whistleblower​ who provided significant information and assistance that helped SEC and another federal agency take successful enforcement actions.