Government healthcare services corporation Maximus agreed to pay a $500,000 fine levied by the Securities and Exchange Commission (SEC) for allegedly failing to disclose an executive’s two siblings were also employed by the company and received annual compensation of more than $120,000.
Maximus will also cease and desist from further violations in reaching settlement, the SEC announced in an administrative proceeding Monday.
The details: In October 2019, Maximus’s board of directors appointed a business segment leader and longtime employee as an executive officer, according to the SEC’s order.
The officer’s two siblings were also employees of Maximus. The Exchange Act requires companies to disclose any “related person” receiving compensation beyond $120,000 when the family member has or will have a direct or indirect material interest.
In annual reports from 2019-21 and in proxy statements, Maximus stated it “‘did not have any related person transactions’” during the corresponding fiscal years, the SEC found.
Compliance considerations: The SEC acknowledged Maximus’s cooperation in reaching settlement, which included self-reporting the violations and prompt remediation.
Company response: “We are pleased we were able to resolve this matter on an amicable basis with the SEC,” a Maximus spokesperson said in an emailed statement.
The company agreed to the settlement without admitting or denying the agency’s findings.