Source:
WSJ he Securities and Exchange Commission for the first time Wednesday ordered an executive to return compensation awarded during years the company misstated financial results -- even though the executive himself wasn't accused of wrongdoing.
In a step that could have broader repercussions, the SEC told Maynard L. Jenkins, the former chief executive of CSK Auto Corp., to give the company back more than $4 million in bonuses and equity compensation he'd earned between 2002 and 2004. Those were years during which the Phoenix auto-parts retailer engaged in fraudulent accounting that boosted its pre-tax income by a total of $66 million, the SEC alleges. CSK restated its earnings for those years twice.
The civil action, filed in U.S. District Court in Arizona, represents the SEC's boldest test of the ``clawback'' provision of the 2002 Sarbanes-Oxley securities-reform law. That provision requires CEOs and chief financial officers to return incentive and equity compensation when companies restate results because of misconduct.
Critics say the provision is vague and poorly worded; it doesn't specify who must be involved in the misconduct. Most companies interpret the law to mean that executives have to be culpable themselves before they can be asked to return money. The SEC itself used the provision rarely, and only in cases where the agency also charged executives with other wrongdoing.
Read more:
http://online.wsj.com/article/SB124831208417074457.html
Unfortunately, they got a little guy here. Maybe they'll go after the big guys some day.
Printer-friendly format
Email this thread to a friend
Bookmark this thread
(1000+ posts)
Send PM |
Profile |
Ignore
