LVMH subpoenaed in FBI media buying probe
Luxury group LVMH has reportedly been issued with a writ to provide evidence as the FBI steps up its investigation into media buying practices. The probe, initiated following a media transparency report commissioned by the ANA, has apparently widened (AdAge).
Key points:
- Investigation follows 2016 report by K2 Partners for the ANA on media transparency
- 150 sources interviewed were granted anonymity at the time. But K2 reported to be “co-operating fully” with law enforcement
- Citing unnamed sources, AdAge previously reported subpoena seeks two years of records, including emails and financial transactions between marketer and agency, and now names marketer as LVMH
- There is no suggestion that either LVMH or its agencies (Havas until last year, now Dentsu Aegis Network) have done anything wrong and nobody has been accused of illegal activity to date
- AdAge sources suggest broader investigation has widened from initial ‘mail and/or wire fraud’ activity to matters that concern the Securities and Exchange Commission and U.S. Treasury departments
Three years on from the ANA’s media transparency report, nobody has been arrested. But the pressure is building - a grand jury has been impaneled and the SEC and Treasury are reportedly getting involved. That might make some people very nervous, given wire or mail fraud alone carries a maximum jail sentence of 20 years, or 30 years if connected to a financial institution. To reiterate, nobody is suggesting LVMH or others have done anything wrong, but it will make very uncomfortable reading for boards of any companies that are dragged into the investigation, whether or not any charges are ultimately laid – and crucially, proven. Nevertheless, the ANA has advised any marketers asked by the FBI to cooperate with the investigation to ensure they have a lawyer present.
