Yesterday’s revelation of a $13 million promotional fraud perpetrated on McDonald’s Restaurants by a senior executive of Simon Marketing [WAMN: 22-Aug-01] saw the Nasdaq stock of parent company Simon Worldwide nosedive from $3.05 to its all-time low of 19 cents.
The freefall was triggered by McDonald’s axing on Tuesday of its quarter-century relationship with Simon after the promotional firm’s security director Jerome Jacobson was arrested by the FBI and charged, along with seven others, of a six-year scam that creamed-off $13m in marketing sweepstake winnings.
Simon Worldwide ceo Allan Brown promised the firm would cooperate absolutely both with the FBI and McDonald’s, and is appointing a law firm to conduct an independent inquiry into the affair.
“We share McDonald's shock at today's allegations,” said Brown. “The more than 400 employees of Simon Worldwide have also been victimized by the alleged actions of one employee, and everyone at our company is determined to do whatever we can to repair our relationship with McDonald's and to maintain our relationships with Simon Worldwide's other clients.”
News source: Advertising Age - Daily Deadline