SEC v. Jenkins: SOX 304 Clawback Requires Innocent CEOs and CFOs to Return Incentive-Based Compensation if the Company Restates Its Financials Due to "Misconduct".
Mondaq Business Briefing › Nbr. 2010, January 2010
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SEC v. Jenkins: SOX 304 Clawback Requires Innocent CEOs and CFOs to Return Incentive-Based Compensation if the Company Restates Its Financials Due to "Misconduct".
In a case of first impression, the United States District Court for the District of Arizona recently ruled that Section 304 of the Sarbanes-Oxley Act of 2002 ("SOX"), the so-called "Clawback Provision," does not require personal misconduct by a company's CEO or CFO to trigger reimbursement obligations after an accounting restatement. Rather, a restatement caused by the misconduct of any officer, agent or employee acting within the scope of his or her employment is sufficient to require...
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