MDC Partners founder Miles Nadal has quit as chief executive as he faces an ongoing Securities and Exchange investigation into expenses.

The advertising holding group, which houses agencies including Crispin Porter + Bogusky, and 72andSunny, said that chief accounting officer Michael Sabatino had also resigned.

Nadal, who has also stepped down from MDC’s board of directors, is being replaced by presiding director of the board Scott Kauffman, who becomes chairman and CEO.

As part of the SEC investigation, MDC said that Nadal has agreed to repay all expenses that “were requested to be repaid by the special committee of the board of directors, including an additional $1.88 million that was recently identified”.

The SEC investigation dates back to October 2014, when it was revealed that Nadal had agreed to pay back $8.6m in expenses from 2009 to 2014.

MDC added in a statement: “In connection with his retirement, Mr Nadal is required under the company’s incentive/retention agreements to repay $10.58 million in retention amounts received between 2012 and 2015. In addition, Mr. Nadal is not eligible for any compensation payments or severance.”

Irwin Simon, who has been made presiding director in light of the changes, said: “Scott is an experienced chief executive who for years has led complex entrepreneurial companies at the crossroads of advertising, technology, and data.

“He has intimate knowledge of MDC Partners and, importantly, a passion for the unique model, culture, philosophy and initiatives that have driven MDC’s success as a network. In partnership with the MDC management team, Scott is ideally positioned to continue to drive the Company’s industry-leading performance, client results, and support for agency partners.”