An office REIT that paid millions to its CEO's companies revealed it is under investigation by the Securities and Exchange Commission.

Paramount Group, which owns office and commercial space in New York and San Francisco, said the SEC investigation is looking at the adequacy of its disclosures for executive compensation, conflicts of interest, transactions with related parties, perks and the use of corporate assets.

Possible failures of the REIT's controls and procedures around those disclosures are also part of the investigation, The Real Deal reported.

As part of its second-quarter filing with the SEC, the firm said it is cooperating with the investigation. The REIT said it didn’t expect the results to have a “material adverse effect” on its business.

A Paramount spokesperson said in a statement to Bisnow that the REIT remains focused on its strategic review "in order to maximize shareholder value."

As part of its annual 10-K report earlier this year, Paramount disclosed it made at least $4M in payments for services retained by CEO Albert Behler in addition to contracts with companies in which he or his wife has ownership interests.

Those payments include more than $3M to a jet chartering company Behler co-owns, as well as $214K for one of the REIT's consultants to retain his wife’s design firm over the past three years. In February, Paramount also entered into a $220K agreement with the design firm.

Paramount also paid more than $900K for Behler’s personal accounting services over the past three years. It spent another $12K last year on wine from the CEO’s vineyard in Germany.

Behler also made more than $20M in 2023, which included around $1.1M in salary and the rest in shares.

Paramount didn't disclose those additional payments until it expanded its materiality threshold this year to include “direct and indirect related party transactions.”

SEC rules require public companies to report related party transactions over $120K.

In May, the REIT announced it had replaced two high-level executives and was undergoing a “review and evaluation of strategic alternatives.”

Wilbur Paes left as the REIT’s chief operating officer, chief financial officer and treasurer, while Gage Johnson vacated his position as senior vice president, general counsel and secretary. Board Member Katharina Otto-Bernstein, Paramount founder Werner Otto’s daughter, also exited.

Ermelinda Berberi was appointed executive vice president, CFO and treasurer, while Timothy Dembo was named senior vice president, general counsel and secretary.

Paramount also hired Bank of America as its financial adviser for the strategic review, which could include a sale.

Paramount rejected previous bids to sell the company for as much as $12 per share in 2020 and 2022. The REIT’s stock was trading at around $6.20 around midday Monday.

UPDATE, AUG. 5, 2:07 P.M. ET: This story has been updated with a comment from Paramount.