On March 7, the US Securities and Exchange Commission (SEC) said that California-based Skechers USA Inc. agreed to pay a $1.25 million civil penalty to settle charges for failing to disclose payments for the benefit of its executives and their immediate family members.
According to the US regulator, from 2019 through 2022, Skechers “did not comply with related person transaction disclosure requirements when it failed to disclose its employment of two relatives of its executives and did not disclose a consulting relationship involving a person who shared a household with one of its executives.” Furthermore, for multiple years, Skechers failed to disclose that two of its executives owed more than $120,000 to the company for personal expenses that had been paid for by Skechers but not yet reimbursed by the executives, it added.
The SEC’s order finds that Skechers violated reporting and proxy solicitation provisions of the Securities Exchange Act of 1934. “Disclosure of related-person transactions provides important information for investors to evaluate the overall relationship between a company and its officers and directors,” said Scott Thompson, Associate Director of Enforcement in the SEC’s Philadelphia regional office. “Today’s action is a reminder that companies should take appropriate measures to ensure proper disclosure of such transactions.”
The SEC also said that Skechers agreed to a cease-and-desist order and to pay the civil monetary penalty without admitting or denying the SEC’s findings.
