Footwear company Skechers agreed to pay $1.25 million to settle charges by the Securities and Exchange Commission (SEC) of failing to disclose payments to executives’ family members.
Skechers U.S.A. agreed to cease and desist from further violations in reaching settlement, the SEC announced in a press release Thursday. The agency acknowledged remedial acts promptly undertaken by the company and cooperation afforded to commission staff.
The details: From 2019 through 2022, Skechers failed to disclose related person transactions involving two relatives of its executives and a consulting relationship involving a person who shared a household with another executive, the SEC alleged in its order.
Further disclosure failures included two executives owing the company more than $120,000 for personal expenses that had been paid for by Skechers but not yet reimbursed, the SEC alleged.
Specifically, the consultant who shared a household with an executive received $210,000 in compensation in both 2018 and 2019, per the order. In 2020 and 2021, a sibling-in-law of an executive received compensation of approximately $213,000 and $155,000, respectively, the agency alleged. In 2021, a sibling of another executive officer received compensation of approximately $486,000.
In all instances, the related persons were nonexecutive employees of the company.
Compliance considerations: Skechers instituted new training and improved policies and procedures concerning related person transactions as part of its remediation process, the SEC said.
Company response: “We are pleased that the [SEC] recognized our cooperation and remedial efforts, and we were able to come to an amicable resolution,” a Skechers spokesperson said in an emailed statement. “This outcome is consistent with the results of our previously announced internal review and the corrective disclosures made over the course of last year.”
The company agreed to the settlement without admitting or denying the agency’s findings.
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