Nadal Leaves MDC Partners Following Expenses Scandal

Miles Nadal, the Chairman & CEO of marcoms holding company MDC Partners, has left after being forced to repay nearly $12.5m in expenses, following an investigation by the SEC. He has been replaced by Scott Kauffman, who has served as Presiding Director since March 2012.

New York and Toronto-based MDC, which was founded by Nadal, 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. These include language and communications research specialist Lunt Global, data analytics businesskenna, and qualitative research firm and focus group facility Ecker & Associates.

Last October, the SEC requested 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 his 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 his legal fees, incurred as part of his sale of 3.5 million MDC shares.

Back in April, Nadal agreed to return $8.6m to the company, for expenses which the SEC says 'lacked appropriate substantiation'. He now has to pay a further $1.88m in recently identified expenses, in addition to being asked to return $10.58m in retention amounts received between 2012 and 2015. Nadal is now not eligible for any compensation payments or severance. Separately, former Chief Accounting Officer Michael Sabatino has resigned, and agreed to repay the company $208,535 in cash bonus payments received between 2012 and 2014.

Kauffman, who replaces Nadal, has been an MDC Partners Board member for nine years. He started his career in advertising as a media planner for Benton & Bowles, and later served in leadership roles at a number of emerging technology companies, including working as Chairman / CEO of AdKnowledge, Coremetrics and Lotame, and he was COO of Blue Lithium at the time of its sale to Yahoo! Irwin Simon, a current member of the Board, who has been appointed as MDC's Presiding Director, comments: 'Scott is an experienced CEO who for years has led complex entrepreneurial companies at the crossroads of advertising, technology, and data. In partnership with the MDC management team, Scott is ideally positioned to continue to drive the company's industry-leading performance, client results, and support for agency partners'.

Web site: www.mdc-partners.com .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

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