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  • September 24, 2021

WPP, the world’s largest advertising group, agreed to pay more than $19 million to settle charges from the Securities and Exchange Commission that it allowed bribery and problematic accounting practices at subsidiaries in Brazil, China, India and Peru.

The S.E.C. charged WPP, which is based in London, with violating the Foreign Corrupt Practices Act by aggressively taking control of smaller firms in high-risk markets and then allowing the leaders of the new subsidiaries to flout WPP’s internal accounting and compliance rules. When faced with repeated warning signs of corruption or loss of control, WPP did not properly respond, according to regulators.

The S.E.C. pointed to one example in India, where a WPP subsidiary bribed Indian government officials for advertising contracts even after the parent company received seven anonymous complaints.

“A company cannot allow a focus on profitability or market share to come at the expense of appropriate controls,” Charles E. Cain, chief of the S.E.C.’s Foreign Corrupt Practices unit, said in a statement. “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.”

WPP did not admit or deny the findings but agreed to stop violating the regulations and pay $19.2 million in fines, according to regulators. The company said in a statement that the charges related to activities that took place until 2018 and that “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.”

Article source: https://www.nytimes.com/live/2021/09/24/business/economy-stock-market-news/

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