SEC Investigation Paramount Faces Scrutiny Over CEO Payments

Paramount faces an SEC investigation after disclosing millions paid to CEO-affiliated firms, raising governance concerns.

August 6, 2025

Valerija I.

Paramount Group is under SEC investigation for potential disclosure failures tied to executive perks and related-party transactions.
Over $4M was paid to firms connected to CEO Albert Behler and his wife, including jet charters and personal accounting services.
The REIT revised its disclosure standards after previously omitting those payments, citing expanded materiality thresholds.
Leadership changes and a strategic review, possibly leading to a sale, signal broader internal restructuring.

Key Takeaways

A Growing Controversy

Paramount Group, a major office REIT with assets in New York and San Francisco, has come under federal scrutiny for failing to adequately disclose millions in payments tied to its CEO. The company revealed in its Q2 SEC filing that the Securities and Exchange Commission is conducting an investigation, reports Bisnow. The probe focuses on possible deficiencies in how Paramount reported related-party transactions, executive perks, and conflicts of interest.

The REIT stated it is cooperating fully with the investigation and doesn’t expect the probe to materially impact its business operations.

Breaking Down The Payments

Earlier this year, in its 10-K filing, Paramount acknowledged paying at least $4M to companies linked to CEO Albert Behler and his wife. Notable examples include:

$3M+ to a private jet charter company co-owned by Behler.
$900K+ for personal accounting services for Behler over three years.
$214K paid to a design firm owned by Behler’s wife via a consultant.
$220K for a new contract with that design firm in February.
$12K spent on wine from Behler’s German vineyard.

Behler himself earned more than $20M in 2023, including $1.1M in base salary.

The REIT only disclosed these payments after broadening its materiality standards this year. SEC rules mandate public firms report related-party transactions exceeding $120K.

Boardroom Turmoil

In May, Paramount made several executive changes tied to a broader strategic review. COO, CFO, and Treasurer Wilbur Paes and General Counsel Gage Johnson both departed, alongside Board Member Katharina Otto-Bernstein, daughter of the company’s founder.

New appointments include:

Ermelinda Berberi as EVP, CFO, and Treasurer.
Timothy Dembo as SVP, General Counsel, and Secretary.

What’s Next For Paramount?

The firm has retained Bank of America to guide its strategic review, signaling a potential sale is on the table. Paramount previously rejected acquisition bids of up to $12 per share in 2020 and 2022. As of Monday, the REIT’s stock was trading near $6.20 — nearly half those previous offers.

While the investigation unfolds, the outcome could play a critical role in shaping the company’s governance reforms, shareholder value strategy, and future leadership structure.