The problems began after the company’s great success in 2015, when it acquired Martha Stewart Living Omnimedia for $ 353 million and the Jessica Simpson shoe and clothing line for $ 120 million. Both brands quickly went out of fashion and sales declined.

But depreciating the value of its acquisitions would have hurt the Sequential share price and made it more difficult to enter into additional agreements. The company remained on its bad news for two years and did not disclose an impairment of $ 304 million until 2017, when Shmidman left the company. In the meantime, the company’s financial statements were “essentially false and misleading,” the SEC said.

In an unusual defense, Sequential had argued that the only victims were its own executives, many of whom were involved in the illegal activity. He described the situation as “nothing more than fraud by company insiders against themselves.” But a federal judge determined that the SEC had sufficient evidence to file a fraud claim.

Sequential did not admit any wrongdoing as part of the settlement, and due to the company’s financial condition, the SEC did not impose a fine.

The Martha Stewart line was sold two years ago for $ 215 million. In September, Simpson bought his clothing line for $ 65 million, which is $ 55 million less than Sequential had paid it.