WASHINGTON D.C. - Footwear giant Skechers U.S.A. Inc. has settled charges with the Securities and Exchange Commission (SEC) for failing to report certain financial transactions involving executives and their relatives, the regulatory body announced today. The California-based company will pay a $1.25 million civil penalty following allegations it did not disclose payments benefiting executives' family members and outstanding loans to executives.
The SEC's findings revealed that between 2019 and 2022, Skechers did not meet disclosure requirements concerning related person transactions. Specifically, the company did not reveal employment of two executive relatives and a consulting arrangement with an individual living with one of its executives. Additionally, Skechers failed to report over $120,000 in personal expenses covered by the company but not reimbursed by two of its executives.
"Disclosure of related person transactions provides important information for investors to evaluate the overall relationship between a company and its officers and directors," stated Scott A. Thompson, Associate Director of Enforcement in the SEC's Philadelphia Regional Office. He emphasized the necessity for companies to ensure proper disclosure of such transactions.
The SEC's order concludes that Skechers breached reporting and proxy solicitation provisions of the Securities Exchange Act of 1934. In agreeing to the settlement, Skechers has not admitted or denied the SEC's findings but consented to a cease-and-desist order along with the payment of the civil penalty.
The investigation leading to these charges was carried out by members of the SEC's Philadelphia Regional Office. This settlement serves as a reminder to publicly traded companies of the importance of transparency in disclosing transactions that could affect investor perceptions and market integrity.
The information in this article is based on a press release statement from the SEC.
InvestingPro Insights
Amidst the recent settlement with the SEC, Skechers U.S.A. Inc. (NYSE: SKX) has shown resilience in its financial performance. According to real-time data from InvestingPro, Skechers boasts a market capitalization of $9.37 billion, reinforcing its position as a significant player in the footwear industry. The company's latest metrics indicate a P/E ratio of 17.14, suggesting that its stock may be trading at a reasonable price relative to its earnings over the last twelve months as of Q4 2023.
InvestingPro Tips highlight that Skechers operates with a moderate level of debt and has been profitable over the last year. Analysts predict that the company will maintain profitability this year, which could be a reassuring sign for investors amid the disclosure issues. Additionally, the company's liquid assets surpass its short-term obligations, which may provide a buffer against financial uncertainties.
From a growth perspective, Skechers has reported a revenue increase of 7.47% over the last twelve months as of Q4 2023, with a robust gross profit margin of 51.9%. This financial health is further emphasized by a notable EBITDA growth of 38.25% in the same period, indicating efficient operations and potential for reinvestment.
Investors looking for a deeper analysis of Skechers' financials and additional insights can find them on InvestingPro. There are 6 more InvestingPro Tips available, offering a comprehensive look at the company's financial standing and future outlook. To access these insights, interested readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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