Issuing its results for the third quarter of the year, the Interpublic Group of Companies said: "The company has been informed by the Securities & Exchange Commission staff that it is conducting an informal inquiry into the matter. The company is cooperating fully with the inquiry."
Adding to the bad news is the fact that the company has been forced to amend its credit facilities.
The charges surround the way revenue was booked at Interpublic's European McCann-Erickson Worldgroup operations. An internal review discovered $101m of intracompany charges at McCann-Erickson WorldGroup, where the charges had been wrongly accounted for.
On top of this, Interpublic has also uncovered an additional $36.3m relating to other costs that were not booked properly. An additional $44m at subsidiaries other than McCann has also been found, relating to an unnamed subsidiary currently within The Partnership division of Interpublic.
John Dooner, chairman and chief executive officer, said: "This has been a trying episode for our company. We have been diligent and thorough in our review process and are confident that we are taking the necessary steps to ensure the mistakes that led to the restatement do not recur."
Interpublic said it was "in the process of terminating certain employees, implementing other personnel changes and strengthening certain control processes related to this matter".
The scandal has already seen McCann-Erickson's chief financial officer Sal LaGreco lose his job. David Bell, who was vice-chairman of The Partnership, has now been moved to another position within Interpublic.
Shares in Interpublic closed on the New York Stock Exchange yesterday at $14.19, down by 0.63%, prior to it issuing its earnings. In after-hours trading, the share price fell as low as $12.79.
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