It has been a good news, bad news kind of week for MusclePharm. Last week, we reported on a new study showing the company’s caffeine-rich thermogenic supplement Shred Matrix is safe, but this week came news the Securities and Exchange Commission (SEC) charged the company (OTC:MSLP) with several accounting and disclosure violations, including failure to disclose nearly half a million dollars in executive perks.

The case is part of ongoing efforts by SEC to focus on reporting issues as well as the responsible accounting and auditing personnel.

SEC charged MusclePharm, its CEO Brad Pyatt and two former chief financial officers, L. Gary Davis and Lawrence Meer, with a number of violations and misconduct after an investigation revealed omitted or understated perks given to executives, including US$244,000 paid to Pyatt for cars, clothes, food, country club fees and Pyatt’s personal tax and legal expenses.

“Executive compensation is material information for investors, and companies must ensure that perks it pays for executives are properly recorded and disclosed in public filings," said Andrew J. Ceresney, director of the SEC’s Division of Enforcement.

MusclePharm opened its own internal review of the disclosure issues, but even after its audit committee chair Donald Prosser became involved, the company continued to file financial statements that failed to disclose expenses/compensation for use of jets, cars and golf club memberships.

So, SEC also charged Prosser. “Prosser, MusclePharm’s audit committee chair, subjected himself to liability when he substituted his wrong interpretation of SEC rules for the views of experts the company had hired, resulting in an incorrect disclosure," Ceresney explained.

The complete list of violations includes:

In addition to these disclosure and accounting violations, SEC found MusclePharm issued stock without a registration statement by agreeing to give company stock to third parties that would pay Musclepharm vendors in cash. According to the SEC, MusclePharm was short on funds to pay its vendors approximately $1.1 million owed for outstanding invoices.

MusclePharm, Pyatt and the other three executives agreed to settle the case by paying fines but not admitting or denying any of the allegations. MusclePharm agreed to pay US$700,000 and hire an independent monitor for one year, while Pyatt agreed to pay US$150,000. Prosser and Davis will each pay US$30,000. Both Davis and Meer agreed to a suspension from practicing accounting for any SEC-related companies; Davis can reapply after two years, Meer after three years.

In a statement, MusclePharm said the SEC investigation focused on disclosure and internal control deficiencies from 2010 to 2013, which have since been revised. “MusclePharm has previously instituted new and expanded disclosure controls and procedures that addressed many of the issues described in the SEC order," a MusclePharm spokesman said. “The company is pleased with the outcome of the proceedings and looks forward to putting this behind it."