Interpublic Announces Development in SEC Investigation
NEW YORK--(BUSINESS WIRE)--June 14, 2007--The Interpublic Group (NYSE: IPG) announced today a development in the investigation being conducted by the staff of the Securities and Exchange Commission into the Company's restatements announced in 2002 and 2005. The company has received a "Wells notice," which invites the company to make a responsive submission before the staff makes a final determination concerning its recommendation to the Commission. Under recently revised settlement procedures, such a notice is now a prerequisite to settlement negotiations with the Commission staff.
"Given our understanding of new procedures at the SEC, this development is not unanticipated and we believe that it moves us a step closer to resolution in this matter," said Interpublic Chairman and CEO Michael I. Roth. "We have been cooperating with the commission since the outset of its investigation in 2002 and it is our intention to share our point of view regarding settlement with them. We look forward to a prompt resolution to their deliberations."
Background on 2002 and 2005 Restatements
The company has previously made the following statements - which continue to apply - regarding its prior restatements and the material weaknesses that gave rise to them.
In connection with the 2005 restatement, no current senior management within the operating units or in the corporate group acted inappropriately and those individuals who were found to have done so at the local level have been separated from the company. Also related to the 2005 restatement, the company has reserved against media and vendor credits and is well on its way to resolving those matters directly with its clients. The shortcomings in the company's control environment that led to the 2002 restatement to address imbalances in intercompany accounts did not involve the misuse of client funds.
"During the past few years, we have moved to the highest standards of transparency and corporate governance," added Mr. Roth, "We continue to be on track to complete remediation of our control environment with the filing of our 2007 10-K."
Interpublic is one of the world's leading organizations of advertising agencies and marketing services companies. Major global brands include Draftfcb, FutureBrand, GolinHarris International, Initiative, Jack Morton Worldwide, Lowe Worldwide, MAGNA Global, McCann Erickson, Momentum, MRM Worldwide, Octagon, Universal McCann and Weber Shandwick. Leading domestic brands include Campbell-Ewald, Carmichael Lynch, Deutsch, Hill Holliday, Mullen and The Martin Agency. For more information, please visit www.interpublic.com.
This release contains forward-looking statements. Statements in this release that are not historical facts, including statements about management's beliefs and expectations, constitute forward-looking statements. These statements are based on current plans, estimates and projections, and are subject to change based on a number of factors, including those outlined in our 2006 Annual Report on Form 10-K under Item 1A, Risk Factors, and other SEC filings. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events.
Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Such factors include, but are not limited to, the following:
- risks arising from material weaknesses in our internal control over financial reporting, including material weaknesses in our control environment;
- our ability to attract new clients and retain existing clients;
- our ability to retain and attract key employees;
- risks associated with assumptions we make in connection with our critical accounting estimates;
- potential adverse effects if we are required to recognize impairment charges or other adverse accounting-related developments;
- potential adverse developments in connection with the ongoing SEC investigation;
- potential downgrades in the credit ratings of our securities;
- risks associated with the effects of global, national and regional economic and political conditions, including fluctuations in economic growth rates, interest rates and currency exchange rates; and
- developments from changes in the regulatory and legal environment for advertising and marketing and communications services companies around the world.
Investors should carefully consider these factors and the additional risk factors outlined in more detail in our 2006 Annual Report on Form 10-K under Item 1A, Risk Factors.
CONTACT: Interpublic Group
Philippe Krakowsky, 212-704-1328
Jerry Leshne, 212-704-1439
SOURCE: Interpublic Group