The D&O Diary

The D&O Diary

A PERIODIC JOURNAL CONTAINING ITEMS OF INTEREST FROM THE WORLD OF DIRECTORS & OFFICERS LIABILITY, WITH OCCASIONAL COMMENTARY

Tag Archives: Clawbacks

District Court Affirms SEC’s SOX Section 304 Right to Recoup Bonus Compensation from Executives of Companies Restating Financials

Posted in Securities Litigation
In a November 13, 2012 opinion (here), Western District of Texas Judge Sam Sparks has upheld the right of the SEC under Section 304 of Sarbanes Oxley to seek to clawback bonus compensation paid to the CEO and CFO of Arthrocare, after the company restated its prior financial statements., even though the CEO and CFO … Continue Reading

Rep. Frank Introduces Bill to Prohibit Insurance for Compensation Clawbacks and Civil Money Penalties

Posted in D & O Insurance
On May 30, 2012, Representative Barney Frank introduced a bill entitled the “Executive Compensation Clawback Full Enforcement Act” (here) that by its own terms is designed to “prohibit individuals from insurance against possible losses from having to repay illegally-received compensation or from having to repay civil penalties.” The proposed Act’s appears primarily addressed to the … Continue Reading

Sarbanes-Oxley Act Clawbacks and D&O Insurance

Posted in D & O Insurance
The SEC has made it clear that it intends to use Section 304 of the Sarbanes-Oxley Act to "clawback" compensation from CEOs and CFOs of companies that restate their financial statements, even if the individuals are not alleged to have engaged in any wrongdoing. A recent district court opinion confirms that the statute gives the … Continue Reading

CEO Not Charged With Fraud But SEC Pursues Clawback Anyway

Posted in Executive Compensation
By the SEC’s own account, an enforcement action the SEC initiated on July 22, 2009 represents the first occasion on which it has used the Sarbanes-Oxley Act’s "clawback" provision to recover compensation from an individual not otherwise alleged to have violated the securities laws. While this type of action apparently was contemplated by the statute, … Continue Reading

Restatements, Clawbacks and CFO Career Consequences

Posted in Corporate Governance, Executive Compensation
If the facts don’t fit, you must remit. That seems to be the view of an increasing number of companies, as they have adopted provisions requiring repayment of executive compensation found to have been based on incorrect financial statements. The concept of compensation clawbacks was actually built into the Sarbanes Oxley Act. Section 304 requires … Continue Reading