MDC’s Nadal Retires as CEO Amid SEC Expense InvestigationGerrit De Vynck
Miles Nadal, chief executive officer of marketing firm MDC Partners Inc., has retired amid a U.S. Securities and Exchange investigation into the company.
Nadal agreed to pay back an additional $1.88 million in expenses to MDC as well as $10.6 million he received in the last three years in incentive and retention payments, the company said in a statement. That’s in addition to $8.6 million he agreed to pay back earlier this year for expenses in connection with the ongoing SEC probe.
Scott Kauffman, a member of MDC’s board, will take over as CEO. In addition, Michael Sabatino, former chief accounting officer, resigned Tuesday. The company said in April the SEC had started an inquiry into Nadal’s expenses as well as accounting, goodwill and trading of the company’s stock by third parties.
MDC doesn’t “expect there will be any material impact to its previously issued financial statements as a result of these additional repayments,” according to the statement. It also reaffirmed annual financial guidance and believes second quarter results, due Aug. 6, are on track.
MDC rose 1.2 percent to $17.83 at the close in New York. The stock is down 22 percent this year.
“The company is strategically well placed to remain on a path of profitable growth and is in a very strong financial and operational position,” Kauffman said in the statement. Kauffman was previously chairman or CEO of advertising technology companies Adknowledge Inc., Coremetrics Inc. and Lotame Soultions Inc.
Nadal founded New York-based MDC in 1980, building it into a holding company that owns more than 50 marketing agencies as well as a majority stake in proxy advisory firm Kingsdale Shareholder Services Inc. MDC has worked with clients including Burger King Worldwide Inc. and Bayerische Motoren Werke AG.
Well-known in his native Canada, Nadal’s name graces a large community center at a prominent intersection in downtown Toronto.
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