Client Alert
SEC Seeks Sarbanes-Oxley Clawback Of CEO Compensation Despite No Allegation of Fraudulent Misconduct
July 28, 2009
Last week, the SEC filed suit against the former chief executive officer of CSK Auto Corporation, claiming that he should be forced to reimburse the company and its shareholders more than $4 million that he received in bonuses and profits from the sale of stock while the company was committing accounting fraud. The SEC alleges that the former CEO is required to reimburse the company under Section 304, the "clawback" provision, of the Sarbanes-Oxley Act of 2002, but does not specifically allege any other violation of the securities laws by the executive. The case represents the first time the SEC has taken action under Section 304 against an executive who is not otherwise accused of violating the securities laws and serves as further evidence of the intense scrutiny being placed today on executive compensation practices.
Click here to read our client alert regarding the recent SEC action.
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If you have any questions regarding the SEC's recent proposals, please contact either the Womble Carlyle attorney with whom you usually work or one of our Corporate and Securities attorneys.
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