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The Ontario Securities Commission offices in Toronto.Fred Lum/The Globe and Mail

Ontario's securities watchdog is looking to mirror a U.S. ban against Miles Nadal, former CEO of MDC Partners Inc.

Earlier this year, the advertising and communications company paid $1.5-million (U.S.) to settle charges that it failed to properly disclose chief executive compensation – including more than $11-million in personal expenses to Mr. Nadal – and violated financial-disclosure rules through its use of non-GAAP financial measures in earnings reports.

In Ontario, the law allows the Ontario Securities Commission to use an expedited process to issue orders when the U.S. Securities and Exchange Commission has already imposed restrictions against the respondent.

As part of the settlement between MDC and the SEC, Mr. Nadal became subject to an order prohibiting him from becoming an officer or director of a publicly traded company for five years.

Now, OSC staff are looking to reciprocate the SEC's ruling in Ontario. They have requested an order that would prohibit Mr. Nadal from acting as a director or officer of any publicly traded company until May 11, 2022, and would force him to immediately resign from any such positions.

Mr. Nadal has co-operated with the OSC and is consenting to the requested order, his lawyer Paul Steep of McCarthy Tétrault LLP said in an e-mail.

A hearing will be held to determine whether issuing such an order would be in the public interest. The expedited hearing will take place in writing, unless the respondent requests an oral hearing.

According to the OSC's statement of allegations, Mr. Nadal is currently a shareholder of three companies registered in Ontario and was previously a director and officer of two of those companies. He previously served as a director of various other companies registered with the OSC.

Mr. Nadal founded MDC in 1986 and ran it until he resigned in July, 2015, during the SEC's investigation.

He agreed to repay $11.3-million in personal expenses covered by the company between 2009-14 and an additional $10.6-million in cash bonus awards he received during his time as CEO.

The SEC order found that MDC reported some expenses covered for Mr. Nadal in its shareholder-proxy circulars, including an annual $500,000 perquisite allowance. But there was approximately $1.88-million in other expenses each year between 2009-14 that the company didn't disclose.

Among the undisclosed expenses are costs relating to cosmetic surgery, pet care, private aircraft, sports cars, jewellery and charitable donations in Mr. Nadal's name, according to the SEC order. Mr. Nadal has made a number of high-profile charitable donations to youth programs, schools, hospitals and Jewish organizations.

The SEC order also found that the company improperly reported non-GAAP financial measures, which companies are permitted to use in addition to standardized generally accepted accounting principles (GAAP). While GAAP measures must be used in audited financial statements, companies can use non-GAAP measures in other reports, such as news releases.

The regulator said MDC did not give GAAP measures equal or greater prominence than non-GAAP measures in its earnings reports, which violates SEC rules.

MDC agreed to the settlement without admitting or denying the allegations.

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