Skechers Settles SEC Charges Over Undisclosed Payments to Executives' Family Members

Skechers U.S.A. Inc., the California-based footwear company, has reached a settlement with the Securities and Exchange Commission (SEC) following charges related to the failure to disclose payments benefiting its executives and their immediate family members. The SEC announced today that Skechers has agreed to pay a $1.25 million civil penalty to resolve the charges.

According to the SEC's order, spanning the years 2019 through 2022, Skechers neglected to adhere to related person transaction disclosure requirements. The company allegedly failed to disclose its employment of two relatives of its executives and neglected to reveal a consulting relationship involving an individual sharing a household with one of its executives. Additionally, the order highlights Skechers' failure to disclose that two of its executives owed more than $120,000 to the company for personal expenses covered by Skechers but not yet reimbursed by the executives.

The SEC's investigation revealed a lack of compliance with reporting and proxy solicitation provisions of the Securities Exchange Act of 1934. In response to the charges, Skechers has neither admitted nor denied the SEC's findings but has agreed to a cease-and-desist order. The company has also consented to pay the $1.25 million civil penalty stipulated in the settlement.

"Disclosure of related person transactions provides important information for investors to evaluate the overall relationship between a company and its officers and directors," emphasized Scott A. 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 settlement reflects the SEC's commitment to upholding transparency and integrity within financial markets, emphasizing the significance of accurate disclosure for investors to make informed decisions. As part of the settlement, Skechers has committed to enhancing its internal controls and procedures to prevent future lapses in related person transaction disclosures. The resolution marks a significant step toward accountability in corporate governance and reinforces the SEC's role in safeguarding investors' interests.

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