DOW JONES NEWSWIRES

Interpublic Group of Cos (NYSE:IPG) . (IPG) agreed to settle the Securities Exchange Commission's accounting fraud charges against the company and its McCann- Erickson unit for $12 million.

The SEC alleged the New York advertising and marketing services company unit fraudulently misstated its financial results by improperly failing to expense intercompany charges that were instead recorded as receivables.

The SEC said IPG negligently failed to address the accounting problems at McCann, its largest unit, resulting in material misstatements in its own financial reporting. The SEC's complaints allege that IPG restated its financial results in the fall 2002 in the amount of $181 million for the period 1997 to 2002. The 2002 restatement was largely attributable to the fact that McCann failed to report accurately its intercompany transactions.

In a separate statement, Interpublic said it had cooperated with the investigation and has "devoted considerable resources" to fixing weaknesses in financial controls and reporting. The company noted it achieved compliance with Sarbanes-Oxley standards at the end of 2007.

Also charged in a separate settled enforcement action were Salvatore LaGreca and Brian Watson.

LaGreca served as McCann's chief financial officer from January 1996 to October 2002. Watson joined McCann's European-Middle East-Africa region as director of operations in 1996.

IPG, McCann, LaGreca and Watson agreed to settle the SEC's charges without admitting or denying the allegations.

LaGreca and Watson also agreed to pay penalties of $25,000 and $50,000, respectively, and pay disgorgement and pre-judgment interest of $46,947 and $17, 325, respectively.

-Veronica Dagher; 201-938-5400; AskNewswires@dowjones.com

    (END) Dow Jones Newswires   05-01-08 1043   Copyright (c) 2008 Dow Jones & Company, Inc.