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Grupo Televisa Bribery of FIFA for Broadcast Rights Securities Class Action

The payment of bribes is generally considered wrongdoing, but securities class actions like this one, aimed at Grupo Televisa and losses from investments in its American Depository Receipts (ADRs), build their case around the company’s misleading statements or concealment of acts of bribery, which are violations of the Securities Exchange Act of 1934.

The class for this action is all persons who acquired Televisa’s ADRs between April 11, 2013 and January 25, 2018.

Grupo Televisa is a Mexican company that runs media and entertainment businesses aimed at the Spanish-speaking world. It interests including television production, broadcasting, cable television, radio production, programming, direct-to-home satellite services, publishing, show business, feature films, and Internet portals.

On April 11, 2013, the company filed a Form 20-F annual report with the Securities and Exchange Commission (SEC). As quoted in the complaint, the document talks, among other things, about its Code of Ethics that applies to all employees. Similar statements were made in other filings during the class period.

The filings also claimed that “the Company’s disclosure controls and procedures are effective” and that there have been no changes during the period under discussion of internal controls.

The Code of Ethics itself speaks of “the highest levels of honesty and integrity” in the exercise of responsibilities “as well as in any action executed in the name of … Grupo Televisa.” The complaint also quotes it as saying, “We wish to succeed based on our merits, and not because we have paid or given something of value illegally to someone in order to obtain some favor or advantage.” It forbids “any bribe, coercion or other payment or benefit” in relation to the group.

However, on November 14, 2017, at the corruption trial of three former executives of Federation Internationale de Football Association (FIFA), a former CEO of a sports-marketing company testified that Televisa and other companies had paid bribes to FIFA executives in exchanger for being granted multi-year broadcasting rights for soccer tournaments. He claimed that the companies had paid a $15 million dollar bribe to a late FIFA executive at a meeting in Zurich, Switzerland.

At the news, Televisa’s ADRs fell by 2.4%.

On January 26, 2018, the company announced that, after discussions with their accounting firm, the company had concluded that “certain material weaknesses in the Company’s internal control over financial reporting existed as of December 31, 2016.” The problems were related to things like access to support systems, segregation of duties within the accounting system, the lack of independent review over certain actions, and ineffective controls over the accounting for certain of the company’s accounts.

At this, the ADRs fell by another 1.38%.

Article Type: Lawsuit
Topic: Securities

Most Recent Case Event

Grupo Televisa Bribery of FIFA for Broadcast Rights Securities Complaint

March 5, 2018

The payment of bribes is generally considered wrongdoing, but securities class actions like this one, aimed at Grupo Televisa and losses from investments in its American Depository Receipts (ADRs), base their case on the company’s misleading statements or concealment of bribery, which are violations of the Securities Exchange Act of 1934. In this case, the complaint claims that Televisa claimed to be an ethical company and to forbid the payment of bribes, even though it participated in the bribery of a FIFA official to gain the rights to broadcast soccer games.

grupo_televisa_sec_compl.pdf

Case Event History

Grupo Televisa Bribery of FIFA for Broadcast Rights Securities Complaint

March 5, 2018

The payment of bribes is generally considered wrongdoing, but securities class actions like this one, aimed at Grupo Televisa and losses from investments in its American Depository Receipts (ADRs), base their case on the company’s misleading statements or concealment of bribery, which are violations of the Securities Exchange Act of 1934. In this case, the complaint claims that Televisa claimed to be an ethical company and to forbid the payment of bribes, even though it participated in the bribery of a FIFA official to gain the rights to broadcast soccer games.

grupo_televisa_sec_compl.pdf
Tags: Bribery or Improper Incentives, Providing False or Misleading Information, Securities, Stock Losses