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WPP pays $19 million in bribery settlement with U.S. SEC

WPP pays $19 million in bribery settlement with U.S. SEC
WPP pays $19 million in bribery settlement with U.S. SEC   -   Copyright  Thomson Reuters 2021   -  
By Reuters

<div> <p>By Katanga Johnson</p> <p><span class="caps">WASHINGTON</span> -Britain’s <span class="caps">WPP</span> has agreed to pay more than $19 million in a settlement with U.S. authorities relating to bribery allegations and accounting controls for its subsidiaries, including in India and China.</p> <p>The world’s largest advertising firm did not admit or deny allegations that it violated provisions of the Foreign Corrupt Practices Act but agreed to pay the penalty, the U.S. Securities and Exchange Commission said.</p> <p>The <span class="caps">SEC</span> order found that <span class="caps">WPP</span> failed to ensure that subsidiaries it acquired implemented its internal accounting controls and compliance policies.</p> <p><span class="caps">WPP</span> implemented an aggressive business growth strategy that included acquiring majority interests in many localized advertising agencies in high-risk markets, it said, citing potential conflicts in India, China, Brazil and Peru during a period between 2013 and 2018.</p> <p><span class="caps">WPP</span> said it had changed its business practices since then.</p> <p>“As the Commission’s Order recognises, <span class="caps">WPP</span>’s new leadership has put in place robust new compliance measures and controls, fundamentally changed its approach to acquisitions, cooperated fully with the Commission and terminated those involved in misconduct,” the company said in a statement.</p> <p><span class="caps">WPP</span> founder Martin Sorrell, who declined to comment to Reuters on the settlement, led the company for more than 30 years before he quit in April 2018. He was replaced as chief executive by Mark Read, another company veteran.</p> <p><span class="caps">WPP</span> failed to “promptly or adequately respond to repeated warning signs of corruption or control failures at certain subsidiaries,” the <span class="caps">SEC</span> said.</p> <p>In one example cited by the commission, a subsidiary in India continued to bribe Indian government officials in return for advertising contracts even though <span class="caps">WPP</span> had received seven anonymous complaints relating to the conduct.</p> <p>“A company cannot allow a focus on profitability or market share to come at the expense of appropriate controls,” said <span class="caps">SEC</span> <span class="caps">FCPA</span> Unit Chief Charles Cain. </p> <p>Friday’s move comes as the nation’s top securities watchdog seeks to stamp out abuses in U.S. markets due to a lack of required controls by companies.</p> </div>