SEC Fines Former MDC Boss Miles Nadal $5.5m

In the US, the SEC has fined former MDC Partners CEO Miles Nadal $5.5m in civil penalties, relating to his failure to disclose millions of dollars in expenses. Nadal has also been banned from serving as an officer or director of a public company for the next five years.

New York and Toronto-based MDC, which was founded by Nadal, operates a Consumer Insights Group offering data and analytics capabilities to other group companies, and has invested in several MR and analytics firms. These include language and communications research specialist Luntz Global, data analytics business kenna, and qualitative research firm and focus group facility Ecker & Associates.

Nadal (pictured) left the company in 2015, after being forced to repay nearly $12.5m, following an internal but SEC-driven investigation into his failure to disclose perks, benefits and other forms of compensation totaling more than $11m during the previous five years. Items Nadal claimed for included private aircraft usage, cosmetic surgery, yacht expenses, jewelry, cash for tips, charitable donations in his name, vacation and personal travel expenses, and pet care. The company also paid nearly $263k for legal fees incurred when Nadal sold 3.5 million MDC shares. However, MDC's proxy statements for 2009 to 2014 failed to disclose an annual average of approximately $1.88m worth of additional benefits provided to Nadal, which meant the firm had understated his compensation by an average of almost 300% each year.

According to the SEC, Nadal knew that the proxy statements contained materially false and misleading executive compensation disclosures, and that they omitted, among other things, numerous personal expenses for which he had sought and obtained reimbursement as if such items were proper business expenses. In an order issued at the end of last week, the SEC stated that even though not admitting or denying the findings, Nadal has agreed to pay $1.85m to return some of these expenses, $150k in interest, and a $3.5m penalty.

Since Nadal left MDC Partners, his investment firm Peerage Capital Canada has become an equity partner and capital provider to wealth-management specialist Echelon Wealth Partners, through an initial $27m financing deal.

Web site: www.mdc-partners.com .