Interpublic Group, the globe’s second largest agency holding company (after WPP Group) revealed Friday that the ‘informal’ investigation into its accounting practices by the Securities and Exchange Commission has been reclassified as ‘formal’.

The news triggered an out-of-hours slump in IPG’s stock price on the New York Stock Exchange from $14.18 (€13.30; £8.80) at Friday’s close to $13.05. No reason was given for the inquiry’s change in status, and an Interpublic spokesperson declined to comment.

But there was no shortage of speculation. “Clearly there’s something there that made [the SEC] want to go further. Either way, the fact [it] became formal is a negative for the stock,” opined an analyst who atypically wanted to remain anonymous.

The inquiry centers around improperly expensed charges at IPG’s McCann-Erickson WorldGroup unit for which the holding company has taken a $181.3 million charge.

The key difference between informal and formal status of the investigation is that the latter can be authorized only by the agency’s commissioners and provides for the subpoenaing of witnesses and documentation.

Data sourced from: USA Today; additional content by WARC staff