Section 304 of the Sarbanes-Oxley Act requires chief financial officers and chief executive officers to reimburse the company bonuses and stock profits following a fraud. The rationale behind the legislation is that they were running the company when misleading information was being put out.
And now for the first time, the Securities and Exchange Commission has announced that former chief executive officer of CSK Auto Corporation Maynard L Jenkins will have to pay his old company back $4 million in bonuses and stock profits he received while the company was committing accounting fraud. Earlier this year, the SEC took action against former CSK executives for inflating the company's profits.
It will be interesting whether the SEC, under its new leadership, will be cracking down harder on fraudster and with that, imposing the clawback provisions on other companies. In this economic climate, regulators and the public want blood.
no comment untill now