Daily Research News Online no. 20808 - MDC Chief to Repay $8.6m Following SEC Inquiry

MDC Chief to Repay $8.6m Following SEC Inquiry

April 30 2015

Miles Nadal, the CEO of marcoms holding company MDC Partners, has agreed to return $8.6m to the company, for expenses which the SEC says 'lacked appropriate substantiation'.

New York and Toronto-based MDC Partners, which was founded by Nadal (pictured) in 1980, is a publicly traded company that has taken majority stakes in companies across a broad range of sectors. The company also operates a Consumer Insights Group to offer data and analytics capabilities to other group companies, and has invested in a number of market research and analytics firms such as language and communications research specialist Luntz Global, data analytics business kenna, and qualitative research firm and focus group facility Ecker & Associates.

Last October, the SEC requested additional information about MDC's payments for Nadal's expenses between 2009 and 2015 - including medical expenses, travel and commuting costs, and his charitable and other unspecified expenses. According to the company's 2015 proxy statement, Nadal received $926,005 in company-paid expenses last year. Of that, $500,000 was for unspecified perks, and $91,038 was for Nadal's personal use of aircraft - including travel between his homes in the Bahamas and West Palm Beach, Florida and the company's head office in New York, as well as travel to business events. Last year, the company also paid $71,967 for Nadal's personal use of an MDC-owned apartment, when he was in New York; and $263,000 for Nadal's legal fees, incurred as part his sale of 3.5 million MDC shares.

Nadal has now agreed to return $8.6m to the company. However, following the SEC's disclosure of the expenses issues, and documents relating to the trade in MDC stock by third parties, a number of legal firms have now launched investigations into potential securities fraud by MDC on behalf of investors.

Web site: www.mdc-partners.com .