SEC Settles with Skechers Over Undisclosed Payments and Loans to Executives

The Securities and Exchange Commission (SEC) has finalized a settlement with California-based footwear giant, Skechers U.S.A. Inc., concerning undisclosed payments to family members of executives and undisclosed loans to its executives. Skechers has agreed to pay a $1.25 million civil penalty to resolve these charges.

The SEC’s findings reveal that from 2019 through 2022, Skechers failed to meet the required disclosure standards for related person transactions. Specifically, the company did not disclose employment relationships with two relatives of its executives, nor did it disclose a consulting relationship with an individual residing with an executive. Moreover, Skechers neglected to report that two executives owed the company more than $120,000 for personal expenses paid on their behalf.

Scott A. Thompson, Associate Director of Enforcement in the SEC’s Philadelphia Regional Office, emphasized the importance of these disclosures, stating that they „provide important information for investors to evaluate the overall relationship between a company and its officers and directors.“ He noted that the enforcement action serves as a reminder to all companies of the need to ensure full transparency in disclosing such transactions.

By settling the charges without admitting or denying the findings, Skechers has agreed to adhere to a cease-and-desist order in addition to paying the penalty. This case highlights ongoing efforts by the SEC to uphold rigorous standards of transparency and integrity within corporate governance, reinforcing the importance of clear and complete disclosure of all executive-related transactions.