WPP, Neo@Ogilvy Planner Spar Over Fraud Case

Gavel

WPP has fired back in a New York Court, urging it to dismiss a lawsuit brought earlier this year by Neo@Ogilvy planner Audrey Gladitsch. She alleged fraudulent over-billing of client IBM by both Neo and Ogilvy & Mather, and unlawful retaliation under the "whistle blower" provisions of the Sarbanes-Oxley Act.

WPP and its agencies characterized Gladitsch's assertions as "ludicrous" and unsupported by facts. "Obviously disappointed in not having received a promotion she did not earn, Gladitsch has twisted the facts and distorted the law in an attempt to turn what she believed was a mistake in billing between a third-party vendor (not her employer Neo) and one of Neo's clients [IBM]" into a more pernicious and intentional fraud and retaliation scheme, claims WPP's brief.

Back in February, when Gladitsch first filed her suit, Ogilvy acknowledged that over-billing had occurred with certain digital buys for IBM, due to a "misunderstanding of contract rates" on the part of some vendors. The shop said the matter was brought to IBM's attention and the matter was rectified with clearer contract language.

In addition, Ogilvy said at the time, the client received credits from all of the vendors who had overcharged it.

The case is particularly sensitive for Ogilvy. Six years ago, two of its senior executives were convicted of fraud in connection with over-billing the U.S. government when the agency was handling the Office of National Drug Control Policy account.

In her suit, Gladitsch alleged that the defendants "had, for years been engaging in fraudulent conduct by subjecting IBM to millions of dollars in overcharges for the services that the company had ostensibly provided."

When she raised the issue, Gladitsch contended, she was threatened by superiors, denied a promised promotion and ultimately taken off the IBM account. She was subsequently demoted to a position that she currently holds.

WPP argued that the whistle-blower allegation was invalid because Gladitsch did not raise any actions that constitute "a violation of securities law or fraud against shareholders," which it argued is a must when making a Sarbanes-Oxley claim.

"At most, she was complaining about a breach of contract and, more likely, merely a billing mistake between a vendor -- not Neo -- and Neo's client," WPP said, adding that even if there were overcharges, the agencies did not profit in any way by them.

As to the retaliation claim, WPP again argued that because Gladitsch had not made allegations of fraud against shareholders, she lacked standing to make a claim under Sarbanes Oxley. In order to make such a charge, the holding company said, "a plaintiff must allege that her employer was defrauding shareholders -- not a client."

Also, WPP argued, while Gladitsch said she "believed the defendants' behavior permitting vendors to overcharge IBM was likely fraudulent ... Gladitsch provides absolutely no factual support to amplify these beliefs."

Gladitsch has until later this month to respond to the motion to dismiss the case. IBM has not commented publicly on the case, and a rep did not return queries by deadline.

2 comments about "WPP, Neo@Ogilvy Planner Spar Over Fraud Case".
Check to receive email when comments are posted.
  1. Eric Rouse from treetop media, August 13, 2011 at 10:34 a.m.

    Why is it WPP always seems to be suing someone or being sued by someone? Publicis, Omnicom, IPG never seem to have such frequent legal problems.

    I'd hate to have to pay their legal bills.

  2. Lisa Carr from Targetbase, August 15, 2011 at 10:32 a.m.

    Good hunch, Eric -- a quick unscientific Google search found three times the results for "WPP lawsuit" as "Omnicom lawsuit." (Publicis is off the charts, but that's due to the recent and huge gender-discrimination suit.)

    In any case, the gal has guts. Good for her.

Next story loading loading..