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Skechers, a prominent footwear company, has agreed to a settlement of $1.25 million with the Securities and Exchange Commission (SEC) following charges of failing to disclose payments to executives’ family members. The SEC announced the settlement in a press release on Thursday, revealing that Skechers U.S.A. has committed to ceasing and desisting from further violations as part of the agreement. The SEC also acknowledged the company's prompt remedial actions and cooperation with commission staff.
According to the SEC's allegations, Skechers failed to disclose related person transactions involving relatives of its executives and a consulting relationship with an individual sharing a household with another executive between 2019 and 2022. Additionally, the SEC cited disclosure failures related to two executives owing the company over $120,000 for personal expenses covered by Skechers but not yet reimbursed.
The SEC's order outlined specific compensation amounts received by the related persons. A consultant sharing a household with an executive received $210,000 in both 2018 and 2019. In 2020 and 2021, a sibling-in-law of an executive received approximately $213,000 and $155,000, respectively, while in 2021, a sibling of another executive officer received around $486,000. Notably, all related persons were nonexecutive employees of Skechers.
In response to the compliance considerations, Skechers implemented new training and enhanced policies and procedures regarding related person transactions. The SEC commended these remedial efforts as part of the settlement.
A spokesperson for Skechers expressed satisfaction with the SEC's recognition of the company's cooperation and remedial efforts, stating, “This outcome is consistent with the results of our previously announced internal review and the corrective disclosures made over the course of last year.” Skechers agreed to the settlement without admitting or denying the agency’s findings.
By fLEXI tEAM
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