• by Larissa Faw , October 29, 2015

An MDC Partners special committee has finalized its investigation into the financial misdeeds by its former CEO Miles Nadal, the company said Wednesday when it reported third quarter financial results. 

Nadal resigned in disgrace this summer amidst a still ongoing U.S. Securities & Exchange Commission probe looking at the company’s accounting and stock trading activities. Nadal has agreed to repay the company more than $20 million in wrongly claimed expenses and incentive bonuses that he received but didn’t stay around long enough to earn. 

The company has recouped $9.5 million from Nadal through Sept. 30 for the bogus  expenses that Nadal filed over a multiyear period. He’s required to pay more than $10.5 million in bonuses that are being clawed back (of which he’s already paid $1 million) by the end of 2017. The company also said it will receive some insurance payments related to the scandal. 

It wasn’t clear if the company would make its investigation findings public. 

In an SEC document filed Wednesday the company said Nadal paid an additional $808,001 for “among other things, travel-related expenses that were paid on his behalf and for certain assets that the Company determined had no ongoing business purpose, including computer and IT equipment.” 

MDC’s third quarter legal fees and expenses relating to the SEC investigation were $2.7 million and $12.4 million for the first nine months. The firm took a one-time charge of $5.8 million for the balance of unrecoverable prior cash bonus awards paid to Nadal and former Chief Accounting Officer Michael Sabatino, who was relieved of his CAO duties back in April and departed the firm at around the same time that Nadal did. 

The company also said it wrote off $1.1 million of “certain assets” not spelled out but that were “related to the CEO and CAO termination.” 

The company reported a loss of $8.6 million in its third quarter versus a loss of $4.9 million last year. Reported revenue for the quarter was $328.4 million in the period, falling short of Wall Street analyst expectations.

The firm reported organic revenue growth 5.7% in Q3 and 7.1% for the first nine months of the year.  

MDC is an "extremely strong business but everything transpired to date has limited what we can say publicly about our financial accounting," says Scott Kauffman, chairman and CEO. “The $89 million of net new business we posted in the first nine months of the year is converting into solid financial results.”

Separately the company said it was delisting its shares from the Toronto exchange because the low trading volume of its shares on the exchange didn’t justify the cost of maintaining a presence. The company’s stock will continue to trade on the NASDAQ exchange. Shares were down about 2% in mid-morning trading Thursday on the NASDAQ to $21.70 and remain about 24% below the price the shares were trading in April just before the company disclosed the SEC investigation, which has now been ongoing for a year.

A class action law suit stemming from April’s disclosure and resulting sharp stock price decline is ongoing in New York. MDC has several more weeks before it is required to respond to the initial complaint.