The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Fri, 31 Jul 2026 11:32:18 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.8 https://corpgov.law.harvard.edu/wp-content/uploads/2024/02/cropped-photography-4-e1706898544564-1-32x32.png Another SEC Clawback Settlement – The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu 32 32 Another SEC Clawback Settlement https://corpgov.law.harvard.edu/2011/12/13/another-sec-clawback-settlement/?utm_source=rss&utm_medium=rss&utm_campaign=another-sec-clawback-settlement https://corpgov.law.harvard.edu/2011/12/13/another-sec-clawback-settlement/#comments Tue, 13 Dec 2011 14:36:47 +0000 http://blogs.law.harvard.edu/corpgov/?p=23499?d=20150113153324EST Posted by Wayne M. Carlin, Wachtell, Lipton, Rosen & Katz, on Tuesday, December 13, 2011
Editor's Note:

Wayne Carlin is a partner in the Litigation Department at Wachtell, Lipton, Rosen & Katz. This post is based on a Wachtell Lipton firm memorandum by Mr. Carlin, John F. Savarese, David A. Katz, and David B. Anders.

On November 15, 2011, the SEC announced a settlement in which it “clawed back” incentive based compensation from a former CEO who was not accused of any wrongdoing.  The result, however, may send mixed signals.  On the one hand, the SEC’s ability to achieve this result in a no-fault clawback case may very well encourage the SEC staff to continue to enforce this remedy, even in cases where the CEO or CFO has no personal responsibility for misconduct.  On the other hand, the settlement of $2.8 million was less than the $4 million that the SEC originally sought to recover from the former CEO.

The case, SEC v. Jenkins, No. CV 09-1510, involved Maynard L. Jenkins, the former CEO of CSK Auto Corporation.  Although civil and criminal charges were brought against four other CSK Auto executives, the SEC did not charge Jenkins with any wrongdoing in connection with the accounting fraud that occurred at CSK.  Nevertheless, relying on Section 304 of Sarbanes-Oxley, the SEC filed a complaint seeking to claw back $4 million of incentive compensation that Jenkins received during the period of the fraud.  Jenkins moved to dismiss the complaint, but that motion was denied in June 2010.  (See our memo, “Sarbanes-Oxley Clawback Developments”, June 16, 2010.)

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