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GOTHAM CITY RESEARCH LLC www.gothamcityresearch.com [email protected]

GOTH M CITY RESE RCH LLC

MDC Partners (ticker = MDCA):

Like Valeant Pharmaceuticals,

But with Understated Debts

“MDC Partners is one of the world's largest Business Transformation

Organizations” – MDCA press releases

“A platform to deliver disruptive business transformation solutions” – Quindell

Annual Report 2013

Organic Revenue Growth is ~1.4% not 7.1% as the Company Claims

MDCA’s audit partner was accused of promoting fraudulent tax shelters

(specifically “loss-generating schemes”)

Leaves

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Disclaimer:

By reading this report, you agree that use of GOTHAM CITY RESEARCH LLC’s research is at your own risk.

In no event will you hold GOTHAM CITY RESEARCH LLC or any affiliated party liable for any direct or

indirect trading losses caused by any information in this report. This report is not investment advice or a

recommendation or solicitation to buy any securities. GOTHAM CITY RESEARCH LLC is not registered as an

investment advisor in any jurisdiction. Gotham City Research LLC is not affiliated or associated with

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profit in the event the issuer’s stock declines. We may buy, sell, cover or otherwise change the form or

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Table of Contents

I.

Disclaimer

II.

Summary

III.

Introduction

IV.

MDCA’s Unstable Business Model: Why it Can Fail OvernightV.

Organic Revenue Growth is ~1.4% not 7.1% as Claimed

VI.

Debt is Understated by at Least 23%

VII.

At least 42%-53% of Reported Profits Are Suspect

VIII.

BDO, Fraudulent Tax Shelters, & Quasi-Captive Entities

IX.

Executive Departures: 72andSunny 2016 = CB+P 2010?

X.

MDCA’s Tone at the Top – ACT (DIS)HONESTLY

XI.

Valuation – shares worth less than $1.00 per share

XII.

End Notes

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GOTH M CITY RESE RCH LLC

aGOTHAM CITY RESEARCH’S OPINIONS

MDCA shares are worth less than $1.00 per share, implying

96%+ downside.

MDCA will restate several years’ historical results as a

result of the issues covered in this report and elsewhere.

The on-going SEC investigation will lead to new revelations

of wrong-doing.

SUMMARY OF FINDINGS

2015 organic revenue growth is ~1.5%, not 7.2% as

reported. Organic growth well below industry averages.

MDCA’s true Debt is understated by ~$300 million, or 23%of stated Debt as of 2015.

At least 42%-53% of reported profits are suspect.

7+ executive departures within recent quarters. At most 3

of Crispin Porter Bogursky’s original 13 partners remain.

Doner lost a key 16 year-old client account in Q4 2015.

72andSunny was recently sued twice for copyright

infringement. Crispin Porter Bogursky was similarly sued

several years ago before CP+B’s fell from grace.

BDO and David Wiener & Co are quasi-captive entities

MDCA used to structure its dubious accounting strategies.

Tax deductible intangibles and goodwill have declined

from 100% tax deductible in 2013 to only 16% in 2015.

MDCA’s former auditor KPMG expressed “an adverse

opinion on the effective operation of, internal control over

financial reporting”. MDCA soon after hired BDO.

The BDO audit partner assigned to MDCA, after MDCA’s

switch from KPMG to BDO, was sued in Nussdorf v BDO

Seidman for promoting fraudulent & illegal tax shelters.

Deferred acquisition considerations paid out to acquired

companies’ partners may be taxed at ordinary income.

Dubious related party transactions continue, despite Miles

Nadal’s departure, e.g. Lori Senecal’s husband hired last

year & compensated $1 million for 5 months’ work.

Company: MDC Partners

CEO: Scott Kauffman

Ticker: MDCA

Exchanges: NASDAQ

Price Target: $1.00/share

Share price: 23.01/share

(as of April 28, 2016 )

52-week high: $23.85

52-week low: $16.15

Shares outstanding:

51.63M

Market cap: $1.19B

2015 Debt: $1.52

Enterprise Value: $2.74B

2015 EBITDA: $115M

EV/EBITDA: 23.6x

2015 FCF: $-29M

Fiscal Year: Dec. 31

Auditor: BDO

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INTRODUCTION

GOTHAM CITY RESEARCH first heard about MDC Partners early last year when MDCA was referred to as

the “Valeant Pharmaceuticals of advertising agencies”. At the time, Valeant’s stock price had reached new

all-time highs, leading many observers to believe that Valeant was a great company. Like Valeant, MDCA

entered the public markets via reverse merger. Many low quality companies & outright frauds have

historically entered the public markets via reverse merger. MDC Partner’s story and its accounting did not

make much sense at the time, but we did not examine it more carefully until recently. On the one hand,

MDCA boasts claims to generate industry-leading organic growth & solid EBITDA margins1:

On the other hand, MDCA appears to be an exceptionally poor company, bleeding cash & issuing debt2:

Gotham City Research has not seen such conflicting qualities in a company since Valeant and Quindell.

We have come to believe that MDC Partners is, indeed, an exceptional company – for all the wrong

reasons. The following specifically lead us to believe the shares are worth less than $1 per share:

MDCA’s true debt is understated by at least 23%.

2015 organic growth is ~1.5%, not the 7.1% figure the company reports.

Key executives are leaving, and growing evidence 72andSunny has peaked.

Pattern of deception and fraud among MDCA’s business partners and/or quasi-captive entities.

Gotham City Research believes the days of MDC Partner’s misrepresentations are coming to an end. We

anticipate that further evidence of malfeasance will be brought to light in the near future.

in millions of $s 2011 2012 2013 2014 2015Revenue $934.0 $1,063.3 $1,148.9 $1,223.5 $1,326.3

Net Loss ($84.7) ($85.4) ($148.9) ($17.2) ($28.3)

Free Cash Flow ($72.4) $7.7 ($95.9) ($57.0) ($10.6)

Total Liabilities $1,108.2 $1,487.8 $1,754.9 $2,090.1 $2,156.4

Shareholders' Deficit ($12.9) ($84.8) ($276.6) ($348.6) ($487.1)

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MDCA’s Unstable Business Model: Why it Can Fail Overnight

One year ago, MDC Partners disclosed that it had received a subpoena from the Securities andExchange Commission (“SEC”). Soon after, Miles Nadal – MDCA’s founder & CEO (at the time)

– left the company.

1

MDC Partners and its enablers would have you believe that MDCA’s problems were limited to Miles Nadal’s improper spending of the Company’s resources. In fact,MDC Partners now claims it is committed to conducting business in accordance with the “higheststandards of business ethics, and to full and accurate disclosure”2. If that were true:

Why does MDCA remain under on-going SEC investigation?

Why do we find evidence MDCA continues to mask its deteriorating financial condition?

Why does MDCA continue to rely heavily on aggressive accounting (e.g. Non-GAAPand/or pro-forma accounting), even after Miles Nadal’s departure (see below)?

Answer: MDCA’s Accounting Conceals an Unstable Business Model that can Fail Overnight

Some companies provide Non-GAAP and/or pro forma figures so that their readers can bettergauge the health of their underlying businesses. We do not believe that is the case with MDCA. Infact, we believe MDCA uses dubious accounting and business practices to confuse, rather thaninform its audience. MDCA is a highly levered roll-up of (mostly) ad agencies, with understateddebts, overstated profits, and overstated organic growth. MDCA can fail overnight, and itsmanagement tries to conceal its fragile business model.

Gotham City Research believes MDCA is similar to other human capital-intensive businesses –e.g., law firms, investment banks, hedge funds –that have failed overnight, especially when ladenwith debt & aggressive accounting:

How is MDCA different from the Above Businesses?

Imagine a highly levered bank (or hedge fund) that overstates its returns, understates its currentoperating expenses, capitalizes its bonus payments owed to employees, and then understates thevalue of those debts. We believe that is MDCA, and that it can fail overnight (if not within weeksor months), just as many banks and funds have failed overnight.

Law Private Equity & Brokerages & MDC

Firms Hedge Funds Investment Banks Partners

Human Capital-Intensive YES YES YES YES

Culture & 'Tone at the Top' Matter YES YES YES YES

Highly Competitive Industry YES YES YES YES

Compensation = Very Large % of Revenues YES YES YES YES

Performance-based Compensation Structures YES YES YES YES

Inherently volatile financial results YES YES YES YES

High risk of Failure if Key Execs Depart YES YES YES YES

Trade at Low Valuations YES YES YES NO

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How MDCA Overstates Earnings & Understates Debt: Quasi-captive Entities + Accounting

We believe accounting staff within MDC Partners – Michael Sabatino and his crew – workedalong with quasi-captive intermediary(ies), (e.g., BDO and David Wiener Associates) so thatMDCA could:

Overstate organic growth

Understate Deferred Acquisition Consideration-related debt

Overstate reported profits

Minimize taxes for all stakeholders, e.g. MDC Partners’ and its acquirees’ taxes

Gotham City Research believes that the above scheme could theoretically continue indefinitelyuntil or unless:

MDCA’s Growth disappears, or the company can’t paper over its deteriorating results.

MDCA incurs too much debt

Whistleblower(s) and/or regulator expose MDCA’s schemes.

As it turns outs, Gotham City Research believes all three conditions above have been met withinthe last 12 months. We start by first exposing MDCA’s reported organic growth rate as a farce.

MDCA works withQuasi-captive entitiesto Structure Deals in

Dubious Manner

MDCA can thenmanipulate its

financial results as itwishes

MDCA Stock PriceAppreciates in Value

Realized Capital Gainsin MDCA Stock

Compensate MDCAinsiders

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For highly acquisitive companies such as MDC Partners, organic growth is a very importantmeasure to gauge the underlying health of their core businesses. The shares of other acquisitive

companies, such as Quindell and Valeant, have run into trouble when they sought to conceal thedeterioration of their true organic growth rates. We find that MDCA meaningfully overstates itsorganic growth rate relative to its peers. On one hand, MDCA claims it is a growth company1:

In reality, we believe MDCA is a low growth company. An independent calculation of organicgrowth leads to a 1.4% growth rate for 2015. Key executive departures, MDCA’s loss of clientele,and accounting irregularities –all are consistent with a low growth rate.

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Organic growth Closer to 1.5% NOT 7.1% - Well Below Its Peers’ 2.8% Average

MDC Partners claims that 2015 organic growth was 7.1%, yet we find the number was 1.4%:2

Perhaps the Company’s claim that its organic growth is 4x more than peers is a Freudian slip; inreality, MDCA’s reported organic growth of 7.1% is overstated by more than 4x.

How we believe MDCA overstates organic growth:

MDCA Treats Some Acquired Revenue as Organic Revenue – MDCA’s claimed7.1% organic growth rate is calculated by using an apple vs orange comparison. Theytake credit for a full years’ 2014 acquired revenue figure compared against a half years’acquired revenue figure. This is an incorrect comparison. We include adjustment* factorsso that the numbers are comparable (leading to comparable revenue**).

Discontinued operations – MDCA has historically dropped acquired companies whoserevenues are declining, and then restate its overall financials as if they never owned thesecompanies. Removing the discontinued operations’ revenue via restatement distorts theorganic growth calculations, as it artificially inflates the organic growth calculation.

Other Signs of Business Deterioration – Executive Departures, Loss of Clients, & More

Recent executive departures, further support our belief that MDCA’s core operations aredeteriorating. The departures would explain why MDCA overstates its organic growth: in reality,key talent is leaving and business is deteriorating, just as the whistleblower alleges. We discussthe executive departures in further detail later in the report, but here are some highlights3:

“72andSunny Veteran Grant Holland Joins Omelet L.A. as CCO” – September 17, 2015

Jeff Sweat founds ‘Mister Sweat’ leaving 72andSunny sometime September 2015

“McCann New York Re-hires Dan Donovan as Executive Creative Director” – August 31, 2015

“Andrew Keller Is Out at Crispin Porter + Bogusky After 5 Years as CEO” – August 19, 2015

“Evan Fry executive director of creative development.” – August 19, 2015

“ ‘Epic Split’ Creative [Martin] Ringqvist Leaves 72andSunny” – August 11, 2015

“President Steve Erich Leaves Crispin, Porter + Bogusky" – June 15, 2015

“Hey, Bob Winter Has Landed a New Gig as Well” – March 25, 2014

Recall that Crispin Porter Bogursky used to be MDCA’s crown jewel. It has fallen sharply (and steadily)

from its peak. Of its original 13 partners, we believe no more than 3 remain4. As we discuss later, Gotham

City Research is seeing recent evidence that 72andSunny will decline as Crispin Porter did.

MDCA 2015 Organic Growth Calculation

$ in 1,000s 2014 2015GAAP revenue $1,224 $1,326

adjustment* $39 $46

Comparable revenue** $1,262 $1,280

Organic Growth 1.40%

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Loss of Key Clientele

In December of last year, MDC Partners’ subsidiary, Doner, lost a long-time client5:

“Cox Automotive has appointed Zambezi as the lead brand strategy and creative agency

for its Autotrader and Kelley Blue Book brands following a competitive review. MDC's Doner has worked on the business for the last 16 years.”

As executives and/or talented personnel leave, we anticipate deterioration in the quality of work provided to clients, and therefore, further loss of business. This happened to Crispin PorterBogusky, formerly MDCA’s crown jewel. We see signs that this is taking place with 72andSunnyas we discuss later in this report.

Organic Growth Accounting Irregularities

The true organic growth rate may even be worse than the 1.4% we calculated. The reported figures

necessary to calculate organic growth may not be accurate nor reliable, as demonstrated by thefollowing accounting irregularities6:

2015

The figures identified above in red – the $13.7 million and $46.3 million – are both from the

2015 10K. Both are supposed to represent acquisition-related revenues for 2015, yet variance between the two figures is unexplained.

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We find similar problems with the 2014 equivalent numbers7:

2014

Revenue-related Disclosures Have Worsened with “New” Management

“It takes two to lie – one to lie, and one to listen.” – Homer Simpson

Under the “new” management (we say “new” because CEO Scott Kauffman, is a long-time MDCABoard member and CFO David Doft is long-time CFO. all the Miles Nadal-related wrong-doinghappened under both Kauffman and Doft’s watch) revenue disclosures have worsened:

“Next, you will notice that beginning with this period, our financial statements now reflect

one operating segment, which in turn equals one reportable segment .

We will no longer be reporting results for Strategic Marketing Services and Performance

Marketing Services.

So, by no means, are we looking to reduce transparency. We actually think this will help

enhance transparency , especially with a more cleaner breakout of corporate as an isolated

item versus before.”

CFO David Doft MDCA’s Q4 2015 earnings call8

We believe that most people would refer CFO David Doft’s above statements, particularly the “weactually think this will help enhance transparency”, as untruthful. The MDCA 2014 and 2015 10Ksclearly falsify his claims, as shown on the next page.

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In the 2014 10K, MDCA provided a revenue breakdown by 3 segments (including Corporate):9

In the 2015 10K provides a revenue breakdown by 2 segments (including Corporate):

Although MDCA appears to be (mostly) a roll-up of ad agencies, it does have stakes in other businesses such as Y Media Labs, Kingsdale Shareholder Services, etc. Investors would benefit ifthe company separately disclosed the financial results of these other businesses.

No Evidence of Investing in Technology Capabilities

CEO Scott Kaufman claimed:

“ MDC's heritage of investing in digital and technology capabilities organically , alongside

creativity at the core of its agencies, continues to be one of its greatest differentiators and will

remain a priority going forward.” 10

Gotham City Research investigated Scott Kauffman’s above claims and found them untrue. Specifically:

MDCA has spent $0 on research and development.11

The words ‘research’ and ‘development’ are barely mentioned in MDCA’s filings, in the context of“investing in digital and technology capabilities organically.”

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If anything Scott Kauffman’s misrepresentations are eerily reminiscent of Quindell’s misrepresentations

(Quindell is a suspect UK roll-up we exposed 2 years ago). Recall, Quindell represented itself as a

cloud/SAAS business:

Quindell made the following SaaSy claims12:

Yet our investigation into Quindell showed that its depictions were materially misleading (moreover, we

showed that Quindell’s accounts resembled Autonomy’s, an infamous accounting fraud)… just as we find

MDCA’s claim of “investing in digital and technology capabilities organically” materially misleading.

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MDCA is a No-Growth, Debt-Fueled Roll-up that also Understates Debt

Highly acquisitive companies that depend on external capital tend to fail. Valeant Pharmaceuticals and

Quindell both struggled to service their external capital obligations as soon as their organic growth

deteriorated. We find that not only is MDCA’s organic growth overstated, its debt levels are understated1:

Gotham City Research believes that MDCA’s true debt is around $300 million more than disclosed. The

company, as required by accounting rules, fully consolidates the revenues of subsidiaries it does not fully

own. As a result, it is important for us to accurately estimate MDCA’s correct enterprise value. We suspect

MDCA concurrently understates debt and overstates EBITDA (we discussed MDCA’s pro forma EBITDA in

the next section) so that its Enterprise Value to EBITDA multiples appears more favorable versus reality.

We estimate true EV/EBITDA to be at least 23.4x:

We believe MDCA has understated its debts in the following manner:

MDCA has consistently understated the Deferred acquisition consideration debt (“DAC”)

liability, as evidenced by detailed information only publicly available in SEC Correspondence

letters.

MDCA’s redeemable noncontrolling interest in Y Medialabs stake balance is severely

understated.

Noncontrolling interests & redeemable noncontrolling interests are understated in a manner

consistent with the DAC, if not more. The changes in redeemable noncontrolling interest note

implies the understatement may be far greater.

Integrated Media, Team Health, & DuMont v. Mintz & Gold LLP et al filings support our claims.

MDCA worked with quasi-captive entities like BDO Wiener & Associates to render these

accounting maneuvers possible2.

MDCA DEBT UNDERSTATED BY AT LEAST 23%

Reported Additional TOTAL

$ in 1,000s Debt Debt DEBT

Financial Debt 741,508 none 741,508

Deferred Acquisition Consideration 347,104 $179,482 526,586

RNCI + NCI Adjustment 148,550 75,779 224,329

Y Media RNCI: $1,999 $28,065 30,064

TOTALS $1,239,161 $283,326 $1,522,487

MDCA's True EV/EBITDA ~2x Greater than Reported

$ in 1,000s Reported Actual

Enterprise Value $2,407,703 $2,691,029EBITDA $197,666 $114,830

EV/EBITDA 12.2x 23.4x

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MDCA’s Typical Acquisition Structure:

In order to examine how MDCA understates its debts, it’s important to first show how MDCA (typically)

structures its acquisitions3:

MDCA initially purchases 60% of an Ad Agency, but only pays a small amount of cash upfront.

The remaining value of that 60% stake is structured as “DAC” and paid over time.

MDCA has the option or obligation to purchase the remaining 40% stake.

Because DAC + Noncontrolling Interests = Debt, it is important to accurately calculate what

their true values are.

MDCA’s primary objectives when structuring these transactions, from an accounting perspective:

Minimize DAC liability on its balance sheet (as it is debt), as not to arouse its lenders’ attention.

Slowly re-adjust the DAC liability over time, in future periods.

Avoid and/or delay income statement consequences, so as not to alarm shareholders.

Keep DAC adjustments as much as possible within the statement of financing activities in the

cash flow statement and balance sheet, as most investors will ignore these sections of the 10K.

How MDCA Minimizes the Deferred Acquisition Consideration

MDCA’s breakdown of the ‘acquisition related payments’ cash outflow (under financing activities) as

only available in the SEC letter shown below offers clues as to how MDCA manipulates the DAC figures4:

Cash PaidUpfront

DeferredAcquisition

Consideration

NoncontrollingInterest

Total Valueof AcquiredCompany

MDCA Initially Purchases 60% of

an Ad Agency.

MDCA Has the Option/Obligation

to Purchase Remaining 40%.

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‘Accretion of present value’ and ‘changes in fair value’ = the means by which DAC manipulated5

Market participants seem to believe that a higher than expected DAC payments is a “rich man’s problem”6,i.e. MDCA’s acquisitions are performing well if the DAC payments are higher than expected. The above

table clearly disproves this belief. The present value adjustment, which is meaningful, has nothing to do

with the acquired company’s future performance.

DAC Present Value Accounting Magic

In order to estimate how much the DAC is understated, we first obtain the estimated DAC payments by

period as shown below7:

Components of Acquisition Related Payments

$ in 1,000s 2011 2012 2013 TOTALS

initial estimated PV payments $33,908 $58,481 $75,405 $167,794

changes in fair value ($2,619) $2,581 $31,553 $31,515accretion of present value $2,998 $7,663 $12,614 $23,275

Total payment $34,287 $68,725 $119,572 $222,584

Components of Acquisition Related Payments - % breakdown

2011 2012 2013 TOTALS

changes in fair value as % of total 98.9% 85.1% 63.1% 75.4%

accretion of present value (7.6%) 3.8% 26.4% 14.2%

Total payment 8.7% 11.2% 10.5% 10.5%

100.0% 100.0% 100.0% 100.0%

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We then reverse the present value adjustment implied within the scheduled DAC payment amounts8:

We reverse the present value adjustment using a WACC of 9.5%9

MDCA uses a WACC weighted average cost of capital of 9.5% according to the SEC correspondence

letter. The SEC correspondence letter is the only place where this information – the discount rate for

the present value adjustment of the DAC – is publicly disclosed. The recent 10K mentions a WACC,

but in the context of goodwill impairment testing (WACC were 8.92% to 11.95%) roughly in-line with

the disclosure provided in the SEC comment letter. Therefore, we assume that the 9.5% WACC is not

out of date.

The additional DAC debt resulting from the PV adjustment is $89 million. We conservativelyassume the fair value adjustment to DAC is equal in value to the PV adjustment (even though

historically the fair value adjustment exceeded the PV adjustment).

The IMS and Team Enterprises payment formulae suggest that the payments are contingent

upon undemanding earnings targets. As a result, we believe DAC is more deferred compensation

than an ‘earn-out’ (though they seem structured such that if performance exceeds the

undemanding targets, they are handsomely compensated). Consequently, we believe the DAC

‘fair value’ adjustments reverse the low-balled assumptions baked in the initial DAC estimates.10

In substance, DAC is little more than capitalized compensation for the acquired companies’

executives (albeit compensation MDCA is contractually obligated to pay, viz. debt)

How MDCA Understates its Y Media Labs Debt:

MDCA purchased 60% of Y Media labs and claims its 60% stake is worth $45 million. That would imply

100% of Y Media Labs is worth $75 million, and the remaining 40% stake, $30 million. Yet MDCA recorded

only $1.99 million on their books in Y Media Labs-related redeemable noncontrolling interest, i.e. they

understated this liability by at least $28 million11:

Additional DAC Debt from the Reversal of the Present Value Adjustment

$ in 1,000s 2016 2017 2018 2019 2020 2021 TOTAL

DAC $130,400 $71,954 $71,954 $27,941 $27,941 $16,914 $347,104

Reversal of PV Adjustment $142,788 $86,275 $94,471 $40,170 $43,986 $29,156 $436,845

Additional DAC Debt $12,388 $14,321 $22,517 $12,229 $16,045 $12,242 $89,741

Y Media Labs Liability Understated

Value of MDCA's 60% stake: $45,096

Implied Value of 40% stake: $30,064

40% stake as reported: $1,999

VARIANCE: $28,065

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At least 42%-53% of Reported Profits are Suspect

Adjusted EBITDA Overstates MDCA’s True Earnings Power

Many publicly-traded companies rely on Pro-forma, Non-GAAP measures – such as AdjustedEBITDA – to report their quarterly earnings. Gotham City Research believes there are legitimatecases whereby pro forma reporting more accurately reflect the underlying health of the business.For example, if a company reports EBITDA, and its calculated free cash flows are roughly in-linewith their pro forma non-GAAP EBITDA, Pro-forma accounting makes sense.

We believe MDCA’s Adjusted EBITDA does not accurately reflect the true earnings power of the business. The variances between Adjusted EBITDA and free cash flow are too high1:

Furthermore, MDCA’s peers’s numbers do not have share this problem: their Pro Forma EBITDAreasonably track free cash flow. Thus, we conclude this is an MDCA-specific problem.2

Compensation is MDCA’s Largest and Most Important Expense

Like investment banks, hedge funds, law firms, etc., compensation is a large and very importantexpense for MDCA (northwards of 50%-60% of revenue).

As a result, the vast majority of MDCA’s add-backs to arrive at adjusted EBITDA areinappropriate, as the vast majority of MDCA’s add-backs are compensation-related (i.e. Deferredacquisition consideration adjustment and stock-based compensation)

By adding back these compensation costs, we believe MDCA overstates EBITDA by at least 42%3:

Adjusted EBITDA vs Free Cash Flow

in millions of $s 2013 2014 2015

Adjusted EBITDA $153 $241 $198Free Cash Flow ($95.9) ($57.0) ($10.6)

VARIANCE ($249.3) ($297.5) ($208.3)

in millions of $s

Adjusted EBITDA $198

EBITDA $115

% VARIANCE (41.9%)

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Adjustments:

Deferred acquisition consideration adjustment – DAC, as we discussed in the priorsection, is nothing more than capitalized compensation. DAC should not be added backto EBITDA, just as bonuses should not be added back to an investment banks’ earnings.

Stock-based compensation –Stock-based compensation is compensation.

Distributions to noncontrolling interests –MDCA’s revenue is reported as if it owned100% of all subsidiaries, which it does not. We exclude this distribution to render thecomparison apples to apples. These represent real transfers of economic interests awayfrom MDCA’s stakeholders.

If we adjust the EBITDA for capital expenditures and some amortization of acquisitions,

we arrive at a more conservative estimate of true earnings/cash flow of $94 million. Thisestimate is 52% less than MDCA’s $198 million Adjusted EBITDA figure.

How Operating Cash Flow is Overstated

The DAC adjustment flows the income statement, added back in the operating activities section,and then reduced within the financing activities. We agree with the SEC, that these DACadjustments should be reflected in the cash flow from operating activities4:

How the DAC and RNCI Liability Shenanigans Help MDCA Overstate Earnings

In the prior section, we demonstrated how MDCA understates the DAC & related on its balance sheet.Those maneuvers should impact the income statement, but do not fully as some of the amounts

circumvent the P&L, directly hitting the paid in capital account within the statement of shareholders’

equity/deficit instead5:

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MDCA’s Golden Handcuff Dilemma – darned if you, darned if you don’t

Management talks enthusiastically about paying off its debt over the next 2 years. Here’s the dilemma

they face. Acquired companies’ partners/top producers have incentive to leave as soon as they are fully

paid their DAC. If these producers leave, hiring replacements is very expensive, and hits the income

statement directly (i.e. operating expenses jump). Retaining these top producers is problematic as well,as they would expect to be paid handsomely, which too would raise opex, and hit profits.

We speculate that this is what is happening with 72andSunny. The earnout contract came to end in 2015.

They renegotiated and retained them with additional DAC payments.

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MDC Partners, BDO, and Quasi-captive Entities – the Missing Link

Despite Founder/Chief Executive Officer Miles Nadal and Chief Accounting Officer Michael Sabatino’s

departure last year, we believe the dubious accounting policies and strategies linger. The SEC investigation

was not motivated solely by Miles Nadal’s bad behavior – the investigation is as much triggered by MDCA’s

suspect accounting.1

Gotham City Research believes there is a common link between all the suspect accounting practices we’ve

described so far:

1.

Michael Sabatino and his accounting crew within MDCA

and

2.

Quasi-captive entities, such as BDO and David Wiener & Associates

We believe the above parties worked together to achieve MDCA’s suspect accounting objectives. The

following findings support our thesis:

(Former) Chief Accounting Officer Michael Sabatino is a former BDO audit partner.

MDCA replaced KPMG with BDO as its auditor, after KPMG issued an adverse opinion.

Joseph Klausner of BDO & partner was assigned to MDCA. Klausner was sued in Nussdorf v BDO

Seidman for promoting fraudulent tax shelters (specifically “loss-generating schemes”).

Michael Sabatino and Joseph Klausner worked in parallel, as evidenced by SEC letters. We suspect

they knew each other and were on cozy terms.

Michael Sabatino worked along-side David C. Wiener on the Integrated Media Solutions

acquisition, and by inference, other MDCA deals.

Michael Sabatino and David Wiener have both spent part of their careers at Eisner LLP. We

suspect they knew each other and were on cozy terms.

David Wiener was sued by an Integrated Media partner for providing dubious tax advice. He was

also accused of representing and receiving compensations from both sides of the transaction.

In both the Klausner and Wiener related lawsuits, the plaintiffs allege that they owed more in

taxes to the IRS than Klausner or Wiener had advised.

MDC Partners’ former auditor – KPMG – expressed “an adverse opinion on the effective operation of,

internal control over financial reporting” in 2006. Subsequently2:

MDCA’s then CFO resigned in 2007.

David Doft became the new CFO (Doft has a “Wall Street” background). Sabatino, not Doft,

appears to have been the brains behind the accounting operations.

MDCA replaced KPMG and hired BDO Seidman.

Recall that there was a flurry of SEC correspondence letters at the time.

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The BDO Seidman partner assigned to MDCA, Joseph Klausner, was sued in Nussdorf v BDO Seidman

for promoting fraudulent tax shelters3:

Plaintiffs faced back taxes, penalties, and interests from the IRS

They claim these were a direct consequence of BDO/Klausman getting plaintiff to utilize loss-

generating schemes determined by the IRS to be illegal/improper.

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Nussdorf v BDO Seidman and Desiree Dumont v. Mintz & Gold LLP; and David C. Wiener & Company

Gotham City Research has identified a few eerie similarities between Nussdorf v BDO Seidman and Desiree

Dumont v. Mintz & Gold LLP, two seemingly unrelated cases4:

In both cases, the plaintiff(s) received a very large and unexpected bill from the IRS.

In both cases, the plaintiff(s) alleged the defendants provided false advice.

o The IMS lawsuit and employment contract – seems specifically designed to treat what

looks like ordinary income as long term capital gains. But IRS assessed Desiree Dumont’s

payments as ordinary income, contrary to what Dumont was advised by Wiener.

o Nussdorf v BDO Seidman – The plaintiffs “utilized loss generating schemes” as advised

that were assessed by the IRS as illegal/improper. Resulted in back taxes, penalty, and IRS.

Michael Sabatino is connected to both cases. In the first, he was MDCA’s Chief Accounting Officer

worked intimately with BDO, and Joseph Klausner BDO partner

The Michael Sabatino connection to Joseph Klausner5:

Both were partners at BDO at some point.

They worked as client/”adviser” as well.

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The Michael Sabatino connection to David Wiener and Desiree Dumont6:

Sabatino and Wiener worked on other MDCA Deals

As evidenced by Weiner’s website, he appears to be an adviser/accountant/ broker for many of MDCA

deals:7

Wiener lists the following MDCA related acquisitions above:

Kirshenbaum & Bond

Crispin porter

Doner

72andsunny

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We guess Wiener worked on behalf of both the acquiree and acquirer, a practice that Desiree Dumont’

lawsuit, alleges: Wiener represented and was compensated by both acquiree (partner) and acquirer

interests without (?) informing the acquire8:

Sabatino and Wiener both worked at Eisner LLP9:

Sabatino biography

Wiener biography

David Wiener is the founder and member of David Wiener and Company LLC, an affiliate of

EisnerAmper LLP. With over 45 years of public accounting experience, David’s practice focuses

on advertising agencies and other marketing communications companies.

BDO never expressed an adverse opinion regarding MDCA’s filings:

As MDCA’s auditor, BDO never expressed an adverse opinion, despite Miles Nadal’s proven

malfeasance, and the SEC’s questions.

BDO remains unscathed and remains MDCA’s auditor (for now).

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Given what happened to Wiener and BDO’s clients, MDCA’s tax-related red flags are concerning10:

MDCA pays negligible amounts of taxes.

MDCA pays negligible amounts of taxes, despite positive US income before taxes.

MDCA provides limited to no disclosures on its tax strategy, despite an apparent reliance on

offshore losses.

MDCA’s tax deductible goodwill and intangibles has declined rapidly, from 100% to 16% as of

2015.

MDCA’s primary objectives when structuring these transactions, from a tax perspective:

Minimize taxes for the acquiree’s partners – i.e. long-term capital gains tax, versus ordinary

income.

Minimize taxes for MDCA via aggressive goodwill treatment. Structure as an Asset purchase if

possible for favorable tax treatment.

Gotham City Research believe that MDCA, its subsidiaries, affiliates, and/or executives are at high risk of

experiencing negative tax-related judgments for the following reasons:

MDCA pays negligible amounts of taxes:

Paying little to no taxes is not i llegal nor necessarily unethical. That being said, we find a pattern of

concern.

For example, tax deductible goodwill and intangibles have declined at an accelerating rate recently.

MDCA deducted 100% of goodwill and intangibles in 2013, and now only 16%:

MDCA's Pay de minimis Income Taxes

$ in millions 2013 2014 2015

Cash income taxes paid $0.9 $0.4 $1.9

Cash interest paid $38.7 $49.3 $52.7

Taxes paid as % of interest 2.4% 0.9% 3.6%

Tax Deductible Goodwill+Intangibles Declining

$ in 1,000s 2013 2014 2015intangibles $10,961 $64,733 $16,721

goodwill $32,786 $146,806 $43,654

TOTAL $43,747 $211,539 $60,375

tax deductible $43,747 $149,232 $9,720

% tax deductible 100.0% 70.5% 16.10%

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Also, the wide variance between Income from US versus Non-US is concerning, given rising scrutiny over

offshore tax-related strategies (MDCA offers little to no disclosures regarding their tax strategy):

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True Assets of Ad Agencies are its People

Like investment banks, law firms, hedge funds, and other human capital-intensive businesses, advertising

agencies’ largest (and only) true asset are its people. MDCA flourish so long as it is able to attract and

retain talent. When talent leaves, the business suffers. There has been a recent wave of executive

departures, leading us to wonder: is this a bug or feature of the MDCA Partners acquisition machine? And

do these departures harm future periods’ financial results? If MDCA’s immediate past is prelude to its

future, the answer is a resounding “yes”:

Key executives of MDCA’s portfolio companies appear to depart after their “Golden handcuffs”

come off (i.e. their deferred acquisition considerations and/or noncontrolling interests are fully

paid).

Crispin Porter Bogursky – MDCA’s former crown jewel – peaked in 2009, soon after MDCA

redeemed the last remaining piece of non-controlling interests in CP+B that same year.1

More recently:

At least 8 executives departed in recent quarters.

A long-time Crispin Porter + Bogusky partner (one of the few remaining) was unceremoniously let

go late last year. He was one of last remaining CP+B original partners.

72andSunny has been hot over the last few years, but there are signs that it is following a similar

trajectory as Crispin Porter Bogursky did several years ago.

72andSunny was recently sued twice for copyright infringement. Crispin Porter Bogursky was

similarly sued several years ago before CP+B’s fell from grace. 2

Executive departures at Valeant Pharmaceuticals, another highly acquisitive company, preceded

its recent troubles. Clearly the art of attracting and retaining good people matters.

Crispin Porter Bogursky’s Fall from Grace – a cautionary tale for 72andSunny

CP+B used to be a legendary advertising agency. It defined success and innovation. In 2008 CP+B was

crowned Agency of the Decade, and by 2010, CP&B was considered the “most-admired agency in

America”. But by then CP+B had already peaked, declining ever since. We outline the sequence of events

that define CP+Bs decline into the present day3:

In 2009, MDCA fully redeemed its remaining non controlling interest in CP+B.

CP+B’s best year financially (to date), was 2009.

By 2010 CP+B was then the largest of MDCA’s subsidiaries and accounted for over 50% of the

company’s profits. CP+B generated $175 million in revenue from big clients including Microsoft,

Nike, Coca-Cola and Volkswagen.

Alex Bogusky, who was named Creative Direct of the Decade, and who was behind key

campaigns/client accounts (Burger King, BMW Mini, Sodastream) left in July 2010.

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Jeff Hicks, another key partner, departed soon after Bogursky left.

After Bogusky and Hicks left in 2010:

CP+B lost the Burger King account.

CP+B and Microsoft (one of its largest clients) sued for intellectually property infringement.

CP+B revenue from Microsoft shrinks afterwards.

CP+B and Coca Cola sued for intellectually property infringement.

Coca-Cola replaces Crispin Porter on Coke Zero account

The staff has shrunk to fewer than 700; about 10% were laid off last month after Microsoft

called a review.

Present:

Of its original 13 partners, (at most) 3 remain.

CP&B CEO Andrew Keller, a longtime creative executive who took the helm in 2010 after Mr.

Bogusky left, was let go last year.

72andSunny Today Looks like the Crispin Porter Bogusky of 2010

Crispin Porter Bogursky used to be MDCA’s crown jewel and now resembles a depreciating asset.

Meanwhile, 72andSunny resembles CP+B in its boom years:

How 72andSunny Became One of the Most Exciting Ad Agencies of L.A.'s Madison Avenue -

WEDNESDAY, JANUARY 22, 2014

Yet there are signs of trouble ahead4:

An artist recently sued Starbucks and 72andSunny for copyright infringement.

Darlene Love sues 72andSunny and Google

Crispin Porter Bogusky of 2010 compared against 72andSunny of today

CP+B 72andSunny2010 Today

Winning multiple awards prior years YES YES

Aggressive revenue growth YES YES

MDCA fully redeemed minority stake YES YES

Intellectually property infringement allegations YES YES

Executive departures YES YES

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“White-collar criminals fabricate false integrity to gain the trust of their victims. Stature, generosity, and

good deeds gain the respect of their potential victims and make it less likely that victims will question their

behavior.” – Sam Antar, Former CFO of Crazy Eddie’s, and now Whistleblower/Forensic Accountant

MDCA’s New ‘Code of Conduct’ – the cover-up is worse than the crime”

The rhetoric found in the new Code of Conduct is praiseworthy. It has an exemplary policy against

dishonesty/fraud1:

Unfortunately, MDCA’s “new” management – we say “new” because CEO Scott Kauffman has been a

member of the company for many years as a Board member and its current CFO David Doft was the same

CFO under Founder Miles Nadal – does not behave honestly. The following serve as the bases of our belief:

The tone at the top has not changed since Miles Nadal and Michael Sabatino’s departure:

MDCA Chairman and CEO Scott Kauffmann was paid 11x more in 2015 than in 2014 despite the

wrong-doing committed by Miles Nadal and the Company.

Lori Senecal’s linkedin profile claims she is/was the CEO of MDC Partners. Her husband was hired

last year and was paid $1 million for less than 6 months’ work.

Other concerning related party transactions.

CFO David Doft remains.

Evidence of deceptive conduct:

Organic growth is zero adjusted for inflation yet Company claims it is far above its industry peers.

The Company provides less business segment disclosures in 2015 versus prior years, yet CFO David

Doft claims, “We actually think this will help enhance transparency, especially with a more cleaner

breakout of corporate as an isolated item versus before.”

CEO Kauffman touts MDCA’s historical organic investment in “digital and technology capabilities”

yet the company has spent zero dollars on R&D.

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Scott Kauffman Receives a Promotion and Pay Raise for Failure (?)

Despite the company’s questionable accounting and business practices under Board member Scott

Kauffman – who has been with MDCA since 2006 – his compensation increased 11-fold in 20152:

Scott Kauffman’s Misrepresentations of the MDC Partners Business

CEO Kauffman claimed:

“MDC's heritage of investing in digital and technology capabilities organically, alongside creativity at the

core of its agencies, continues to be one of its greatest differentiators and will remain a priority going

forward.” 3

MDCA has no reported R&D spending4

:

MDC Partners' R&D Spending

$ in millions 2013 2014 2015

R&D $0.00 $0.00 $0.00

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David Doft Unethical and/or Unfit Comments for a CFO

CFO David Doft is either unethical and/or not fit for the role of CFO, as evidenced by his lack ofknowledge of MDCA’s segment reporting, despite being its CFO since 2007:

So, by no means, are we looking to reduce transparency. We actually think this will helpenhance transparency , especially with a more cleaner breakout of corporate as an isolated

item versus before.” – David Doft Q4 2015 earnings call5

MDCA disclosed more revenue segment information prior to 2015 – Strategic Marketing Services,

Performance Marketing Services, and Corporate6:

As of 2015 – Only discloses Advertising and Communications and Corporate segments

Mr. Doft appears unaware that MDCA provided a breakout of corporate in the past as well. Doft

may be liked by Wall Street, as he has a background in Wall Street. We believe the Street’s trustin MDCA’s CFO is misplaced, however, just as Wall Street’s trust in Valeant’s former CFO,Howard Schiller, was misplaced (recall Schiller too used to be loved by Wall Street and was long-time Goldman Sachs banker).

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Lori Senecal Claims to have been the CEO of MDC Partners

Lori Senecal’s linkedin profile indicates she was the CEO of MDC Partners7:

MDCA hired Lori Senecal’s husband last July, and compensated him ~$1 million for less than 6 months’work8:

Additional Questions about Lori Senecal’s ethics9:

“McCann Erickson accused Kirshenbaum Bond Senecal + Partners, an MDC agency, of taking key

executives who should have been bound by non-compete contracts.”

For all the reasons stated in this section, as well as earlier this report, Gotham City Research believes

MDCA’s CEO and CFO violates the Code of Conduct.

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The SEC Investigation – Why the January 2016 Letter is Concerning

MDCA’s recent (and on-going) spate with the SEC began in early 2014, when a whistleblower alerted SEC

into Miles Nadal bad behavior and MDCA accounting issues10:

When MDC Partners released its year-end earnings report in February, 2014, the news was

upbeat: record results that included growth in cash flow and profits. It was “another year ofexceptionally strong performance for MDC Partners,” the company’s founder and CEO, MilesNadal, said in a press release.But that announcement would change MDC in ways few would realize. Within days, awhistleblower filed a complaint with the U.S. Securities and Exchange Commission, the topregulator of the New York City based company.

SEC correspondences began shortly thereafter:

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In the September 11, 2014 correspondence letter, the SEC sounded displeased with MDCA’s responses,

and included these warnings11:

Shortly thereafter, the SEC issued a subpoena on October 5, 2014:

MDCA Discloses it received a subpoena from the SEC on April 28, 2015. Miles Nadal and MichaelSabatino leave a few months later

SEC correspondence letters resume; SEC gets company to enhance disclosures (September 18 th 2015)

After several correspondences between MDCA and the SEC in late 2015, regarding new accounting

questions, the SEC issued a letter on January 8 th, 2016, that includes identical warning language it provided

in the SEC letter that preceded the Company’s April 28th 2015 disclosure of a subpoena. If past is prelude

to future, that is not a good sign for MDCA.

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The “Valeant Pharmaceuticals of Ad Agencies”

When we first learned about MDCA early last year, both it and Endurance International Group (which we

published on one year ago), were referred to as the “Valeant Pharmaceuticals” of the Advertising and web

hosting industries respectively. Recall that some market participants regarded that comparison a

compliment at the time, as Valeant’s stock price had relentlessly risen upward in a short period of time.

Here are some of the (eerie) similarities we have identified between VRX and MDCA:

Valeant Pharmaceuticals 1 year ago MDC Partners

Organic growth overstated Organic growth ~1.5%, not 7.5%

Suspect pro forma profits via aggressive

accounting

High variance between pro forma profit

versus cash flow.

Debt -fueled acquisitions

Philidor

Whistleblower (R&O/Philidor)

Executive departures

Pays de minimis taxes

CFO with “Wall Street” Background

Low R&D spending

Suspect pro forma profits via aggressive

accounting

High variance between pro forma profits

versus cash flow.

Debt -fueled acquisitions

David Wiener Associates?

SEC Investigation Whistleblower

Executive departures

Pays de minimis taxes

CFO with “Wall Street” Background

No R&D spending

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Industry standard Enterprise Value of EBITDA multiples imply that MDCA shares are worth $0/share

MDCA’s peers’ shares trade at 9x-10x EV/EBITDA multiples (Enterprise value as a multiple of EBITDA).

MDCA’s shares trade as if its EV/EBITDA is between 12.2x-23.4x 1:

Gotham City Research believes MDCA deserves at most a EV/EBITDA multiple on par with its peers, i.e. a

9x-10x multiple. The following table lead us to believe MDCA shares are worth at most $1.00 per share 2:

Valuation Assumptions

Long-term nominal organic revenue growth is between 1%-3%, and real organic growth is

close to 0%

Normalized EBITDA of $115 million – Given real organic growth does not grow, we use our

earlier EBITDA estimate as normalized EBITDA. We provide a sensitivities analysis above to show

the shares still look quite unattractive at higher EBITDA assumptions albeit lower multiples.

Debt Assumptions – The above table uses the reported debt figures, rather than the adjusted

debt figures we calculated. Our estimate of true debt would only depress the equity valuations

even further.

As you can see from the above table, it takes very little for MDCA shares to be rendered worthless (or

theoretically) far less than worthless.

Incidentally, MDCA’s Altman Z score implies a high risk of bankruptcy.

MDCA's True EV/EBITDA ~2x Greater than Reported

$ in 1,000s Reported Actual

Enterprise Value $2,407,703 $2,691,029

EBITDA $197,666 $114,830

EV/EBITDA 12.2x 23.4x

EV/EBITDA Multiple

EBITDA 5x 6x 7x 8x 9x 10x 11x 12x 13x 14x 15x

$47 ($20.64) ($42.36) ($17.62) ($16.71) ($15.80) ($14.89) ($13.98) ($13.07) ($12.16) ($11.25) ($10.34)

$59 ($18.31) ($17.17) ($16.03) ($14.89) ($13.75) ($12.61) ($11.47) ($10.34) ($9.20) ($8.06) ($6.92)

$73 ($16.88) ($15.46) ($14.04) ($12.61) ($11.19) ($9.77) ($8.34) ($6.92) ($5.50) ($4.07) ($2.65)

$92 ($15.10) ($13.33) ($11.55) ($9.77) ($7.99) ($6.21) ($4.43) ($2.65) ($0.87) $0.91 $2.69

$115 ($12.88) ($10.66) ($8.43) ($6.21) ($3.98) ($1.76) $0.46 $2.69 $4.91 $7.14 $9.36

$138 ($10.66) ($7.99) ($5.32) ($2.65) $0.02 $2.69 $5.36 $8.03 $10.70 $13.36 $16.03

$165 ($7.99) ($4.78) ($1.58) $1.62 $4.82 $8.03 $11.23 $14.43 $17.63 $20.84 $24.04

$198 ($4.78) ($0.94) $2.90 $6.75 $10.59 $14.43 $18.27 $22.12 $25.96 $29.80 $33.65

$238 ($0.94) $3.67 $8.28 $12.89 $17.51 $22.12 $26.73 $31.34 $35.95 $40.57 $45.18

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End Notes

Introductions

1.

MDCA company presentations

2.

MDCA 10K filings

MDCA’s Unstable Business Model: Why it Can Fail Overnight

1.

http://www.mediapost.com/publications/article/254640/mdc-partners-sec-probe-sparked-by-

whistle-blower.html

a.

http://www.theglobeandmail.com/report-on-business/mdc-and-sec-an-accounting-

conflict-nadals-successors-must-address/article25672514/

b.

http://www.theglobeandmail.com/report-on-business/miles-nadals-shock-resignation-

latest-fallout-from-sec-whistle-blower-case/article25611817/

2.

MDCA Code of Conduct


1.

MDCA company presentations

2.

MDCA Company filings

3.

Departures

a.

http://www.adweek.com/news/advertising-branding/andrew-keller-leaving-crispin-

porter-bogusky-after-5-years-ceo-166465

b.

http://www.adweek.com/agencyspy/ceo-andrew-keller-and-ecd-evan-fry-out-at-

cpb/91521

c.

http://www.adweek.com/agencyspy/breaking-president-steve-erich-leaves-crispin-

porter-bogusky/88108 d.

https://www.linkedin.com/in/bob-winter-7244865 ,

e.

http://www.adweek.com/news/advertising-branding/crispin-porter-bogusky-seeks-

new-ecd-156562

f.

http://www.adweek.com/news/advertising-branding/mccann-new-york-re-hires-dan-

donovan-executive-creative-director-166649

g.

http://www.adweek.com/agencyspy/epic-split-creative-ringqvist-leaves-

72andsunny/91017

h.

http://www.adweek.com/agencyspy/epic-split-creative-ringqvist-leaves-

72andsunny/91017

i.

http://www.adweek.com/agencyspy/72andsunny-veteran-grant-holland-joins-omelet-l-

a-as-cco/93562 j.

https://www.linkedin.com/in/jeffsweat

4.

Gotham due diligence

5.

http://adage.com/article/agency-news/autotrader-hires-zambezi-16-years-doner/301882/

6.

MDCA 2015 10K

7.

MDCA 2014 10K

8.

MDCA’s Q4 2015 earnings call transcript

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9.

MDCA 10Ks

10.

MDCA’s Q3 2015 earnings call transcript

11.

MDCA 10Ks

12.

Quindell: a Country Club Built on Quicksand


1.

MDCA 10Ks, SEC correspondence letters, DuMont v. Mintz & Gold LLP et al

2.

DuMont v. Mintz & Gold LLP et al

3.

MDCA 10Ks

4.

SEC Correspondence letter

5.

SEC Correspondence letter, MDCA 10K 2015

6.

MDCA earnings Q&A analyst comment/question.

7.

10K 2015

8.

“”

9.

SEC Correspondence letter and 10Ks10.

IMS and Team Enterprise Contracts – exhibits in 10K 2010

11.

10K 2015

At least 42%-53% of Reported Profits are Suspect

1.

MDCA 10K filings

2.

Peer annual reports

3.

10K 2015 and Q4 2015 earnings release

4.

SEC correspondence letter

5.

MDCA 10K 2015


1.

http://www.mediapost.com/publications/article/254640/mdc-partners-sec-probe-sparked-by-

whistle-blower.html

2.

MDCA proxy filings

3.

http://www.courts.state.ny.us/reporter//pdfs/2012/2012_33392.pdf

4.

Nussdorf v BDO Seidman and Desiree Dumont v. Mintz & Gold LLP

5.

SEC Correspondence letters

6.

MDCA 10K filings

7.

Eisner amper website8.

Desiree Dumont v. Mintz & Gold LLP

9.

MDCA 10Ks and Eisner amper website

10.

MDCA 10K filings

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1.

http://adage.com/article/agency-news/tale-2-crispins-agency-decade/291465/

2.

http://www.law360.com/articles/296990/microsoft-settles-with-gag-gift-maker-over-copied-

ads

a.

http://www.laweekly.com/arts/how-72andsunny-became-one-of-the-most-exciting-ad-

agencies-of-las-madison-avenue-4378953

b.

http://www.adweek.com/agencyspy/artist-sues-starbucks-72andsunny-for-copyright-

infrigement/88848

3.

http://adage.com/article/agency-news/tale-2-crispins-agency-decade/291465/ 4.

http://www.hollywoodreporter.com/thr-esq/darlene-love-sues-google-using-857220

a.

http://www.adweek.com/agencyspy/artist-asks-judge-to-reconsider-case-against-

starbucks72andsunny/102943


1.

MDCA Code of Conduct, 2015 10K

2.

MDCA Proxy filing 2015

3.

http://seekingalpha.com/article/3616896-mdc-partners-mdca-scott-kauffman-q3-2015-results-

earnings-call-transcript?part=single

4.

MDCA 10K filings5.

MDCA Q4 2015 earnings call transcript

6.

MDCA 10K 2015 and 10K 2015

7.

Lori Senecal linked profile

8.

MDCA Proxy filing 2015

9.

http://www.cbsnews.com/news/how-not-to-settle-a-talent-poaching-suit-email-says-mccann-

bungled-200k-deal/

10.

Globe and Mail article

11.

SEC Correspondence letter


1.

MDCA 10K filings

2.

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