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UPDATE 2-Ad group WPP to probe alleged misconduct by CEO Sorrell, who rejects accusations

accusations@ (Adds Sorrell's statement, paragraphs 3-4)

April 3 (Reuters) - British advertising group WPP Plc said on Tuesday it was conducting an investigation in response to an allegation of personal misconduct against its chief executive, Martin Sorrell, who denied wrongdoing.

WPP, the world's biggest advertising company, issued a statement after The Wall Street Journal reported news of the probe earlier in the day. WPP's board is also looking into whether Sorrell misused company assets, the Journal said, citing unnamed sources.

Sorrell, in response to WPP's announcement, said he rejected the allegation "unreservedly" but recognised that the company had to investigate.

"I understand that this process will be completed shortly," he said in a statement. "Obviously, I shall play no part in the management of the investigation under way."

The board has hired a law firm to investigate some of the issues, the Journal reported.

The company statement and the newspaper report gave no further details on the accusations.

Separately on Tuesday, securities litigation firm Block & Leviton LLP said it was looking into whether WPP and certain of its officers and directors violated federal securities laws.

One of Britain's best-known business leaders, Sorrell built advertising group WPP from a two-man operation in a London office in 1985 to one that now dominates the industry with around 134,000 staff in more than 100 countries. (Reporting by Shalini Nagarajan in Bengaluru; Editing by Leslie Adler and Peter Cooney)