The investigation dates back to October, when it was revealed that Nadal had agreed to pay back $8.6 million in questionable expenses from 2009 to 2014, including travel and medical expenditures.
The investigation also encompasses MDC’s accounting practices and third-party trading in the company’s securities.
Nadal, who founded MDC in 1980, will be succeeded by Scott L Kauffman, who has served as presiding director on the company’s board of directors. Irwin Simon, a current member of the company’s board, will replace Nadal as MDC’s presiding director.
MDC has long been known as a creative-friendly alternative to the big three holding companies, preferring to take a financial stake in small, emerging agencies rather than buy them outright.
That approach has helped industry darlings like CP&B and 72 and Sunny expand their reach and influence.
The company’s reputation took a hit when it was revealed that Nadal had not only charged MDC millions in questionable expenses, but had taken a base salary in 2014 of $1.85 million, far higher than his counterparts at larger holding companies received.
Wall Street analysts reacted positively to the news of Nadal’s departure.
"We view this evening’s announcement of Miles Nadal’s retirement as largely positive and see his replacement, Scott Kauffman, who has served on MDCA’s board for the past nine years, as providing a seamless transition near term as the company continues its growth momentum," Evercore analysts said in a research note.
MDC’s stock tumbled following the announcement of the investigation in October.
In a statement, Kauffman praised Nadal’s leadership and spoke positively of MDC’s future.
He said: "Miles Nadal founded MDC Partners and for more than three decades guided the company’s strong growth. Without his vision and leadership.
"MDC Partners would not have achieved the exceptional success we enjoy today. The company is strategically well placed to remain on a path of profitable growth and is in a very strong financial and operational position. I look forward to leading the company through its next phase of growth."
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