The SEC entered into a settlement with the former Chief Executive Officer of MDC Partners, Inc., a Canadian incorporated, New York-based marketing company, following the CEO’s failure to disclose to shareholders his receipt of $11.285 million in perks from the company. The SEC, upon charging the resigned CEO with violating Exchange Act, Section 10(b)/Rule10b-5, among other Act and rule sections, ordered him to: (1) cease and desist from causing future violations; (2) refrain from being a company director or officer for five years from the order date; and (3) pay a total $5.5 million—$1.85 million in disgorgement, $150,000 in prejudgment interest, and $3.5 million in civil penalties (In the Matter of Miles S. Nadal, May 11, 2017).
Failure to disclose perks. The SEC acknowledged that the CEO, on the company’s 2009 to 2014 proxy statements, disclosed $3.87 worth of perquisites and personal benefits. But the SEC’s complaint declared that during this same period, the CEO failed to disclose an additional $11.285 million in perks that he used for a private aircraft, cosmetic surgery, yacht-and-sports-car-related expenses, jewelry, cash for tips and gratuities, medical expenses for family members, charitable donations, pet care, club memberships and travel.
G. Jeffrey Boujoukos, the SEC’s Philadelphia Regional Office Director, said that "perks paid to corporate executives should be properly disclosed so that investors can make informed decisions. Nadal improperly received and failed to disclose millions of dollars in compensation."
The release is No. 80652.
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